[Senate Hearing 110-634]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-634
 
 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 27, 2008

                               __________

         Printed for the use of the Committee on Armed Services


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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

EDWARD M. KENNEDY, Massachusetts     JOHN McCAIN, Arizona
ROBERT C. BYRD, West Virginia        JOHN WARNER, Virginia,
JOSEPH I. LIEBERMAN, Connecticut     JAMES M. INHOFE, Oklahoma
JACK REED, Rhode Island              JEFF SESSIONS, Alabama
DANIEL K. AKAKA, Hawaii              SUSAN M. COLLINS, Maine
BILL NELSON, Florida                 SAXBY CHAMBLISS, Georgia
E. BENJAMIN NELSON, Nebraska         LINDSEY O. GRAHAM, South Carolina
EVAN BAYH, Indiana                   ELIZABETH DOLE, North Carolina
HILLARY RODHAM CLINTON, New York     JOHN CORNYN, Texas
MARK L. PRYOR, Arkansas              JOHN THUNE, South Dakota
JIM WEBB, Virginia                   MEL MARTINEZ, Florida
CLAIRE McCASKILL, Missouri           ROGER F. WICKER, Mississippi

                   Richard D. DeBobes, Staff Director

              Michael V. Kostiw, Republican Staff Director

                                  (ii)

  




                            C O N T E N T S

                               __________

                    CHRONOLOGICAL LIST OF WITNESSES

 Current and Future Worldwide Threats to the National Security of the 
                             United States

                           february 27, 2008

                                                                   Page

McConnell, Hon. John M., Director of National Intelligence (DNI); 
  Accompanied by Timothy E. Langford, Cuba-Venezuela Mission 
  Manager, DNI; Benjamin A. Powell, General Counsel, DNI; Alan R. 
  Pino, National Intelligence Officer for Middle East, DNI; and 
  Thomas Fingar, Deputy Director for Analysis, DNI...............     7
Maples, LTG Michael D., U.S. Army, Director, Defense Intelligence 
  Agency.........................................................    33

                                 (iii)


 CURRENT AND FUTURE WORLDWIDE THREATS TO THE NATIONAL SECURITY OF THE 
                             UNITED STATES

                              ----------                              


                      WEDNESDAY, FEBRUARY 27, 2008

                                       U.S. Senate,
                               Committee on Armed Services,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:34 a.m. in room 
SD-106, Dirksen Senate Office Building, Senator Carl Levin 
(chairman) presiding.
    Committee members present: Senators Levin, Reed, E. 
Benjamin Nelson, Inhofe, Sessions, Graham, Thune, and Martinez.
    Committee staff members present: Richard D. DeBobes, staff 
director; and Leah C. Brewer, nominations and hearings clerk.
    Majority staff members present: Madelyn R. Creedon, 
counsel; Evelyn N. Farkas, professional staff member; Richard 
W. Fieldhouse, professional staff member; Michael J. Kuiken, 
professional staff member; Gerald J. Leeling, counsel; Thomas 
K. McConnell, professional staff member; Michael J. McCord, 
professional staff member; William G.P. Monahan, counsel; and 
Michael J. Noblet, professional staff member.
    Minority staff members present: Michael V. Kostiw, 
Republican staff director; William M. Caniano, professional 
staff member; David G. Collins, research assistant; and Lynn F. 
Rusten, professional staff member.
    Staff assistants present: Kevin A. Cronin, Jessica L. 
Kingston, and Benjamin L. Rubin.
    Committee members' assistants present: James Tuite, 
assistant to Senator Byrd; Andrew R. Vanlandingham, assistant 
to Senator Ben Nelson; Jon Davey, assistant to Senator Bayh; 
Gordon I. Peterson, assistant to Senator Webb; Nathan Reese, 
assistant to Senator Inhofe; Todd Stiefler, assistant to 
Senator Sessions; Jason Van Beek, assistant to Senator Thune; 
Brian W. Walsh, assistant to Senator Martinez; and Erskine W. 
Wells III, assistant to Senator Wicker.

       OPENING STATEMENT OF SENATOR CARL LEVIN, CHAIRMAN

    Chairman Levin. Good morning, everybody. Before we begin, 
let me just give you a quick report. I talked to Senator Warner 
a few minutes ago. He sounds great. He's going to be released 
from the hospital today. Our thoughts, of course, are also with 
Senator Byrd, and hope for a very quick recovery for our other 
colleague on this committee.
    On behalf of the whole committee, let me welcome our 
witnesses to today's hearing on current and longer-term threats 
and the intelligence challenges around the world. We're glad to 
have Director of National Intelligence (DNI) Mike McConnell and 
Defense Intelligence Agency (DIA) Director General Maples 
appearing here today. This committee has a special 
responsibility to the men and women of our Armed Forces to be 
vigilant on intelligence programs because decisions on whether 
or not to use military force and the planning for military 
operations depend so heavily on intelligence.
    For instance, we face a growing threat in Afghanistan, with 
the President painting a rosy picture of the situation there 
for the American people. Recently he said that in Afghanistan 
the Taliban, al Qaeda, and their allies are on the run. But on 
the other hand, recent independent reports by the Afghanistan 
Study Group and the Atlantic Council provide a very different 
assessment. Among the findings of these Afghanistan reports are 
the following. Efforts to stabilize Afghanistan are faltering. 
The Afghanistan Study Group reports that since 2002 ``violence, 
insecurity, and opium production have risen dramatically, as 
Afghan confidence in their government and its international 
partners falls.''
    The Atlantic Council report states: ``Make no mistake, the 
North Atlantic Treaty Organization (NATO) is not winning in 
Afghanistan. Instead, the security situation is a strategic 
stalemate,'' in their words, ``with NATO and Afghan forces able 
to win any head-to-head confrontation with the Taliban, but not 
being able to eliminate the insurgency so long as the Taliban 
enjoys a safe haven across the border with Pakistan.''
    The anti-government insurgency threatening Afghanistan has 
grown considerably over the last 2 years, according to the 
Afghanistan Study Group. Last year was the deadliest since 2001 
for U.S. and international forces there. The Taliban are 
relying entirely increasingly on terrorism and ambushes, 
including over 140 suicide bombings in 2007.
    The Afghanistan Study Group report also finds that the 
Taliban have been able to infiltrate many areas throughout the 
country, intimidating and coercing the local Afghan people. The 
Atlantic Council report concludes: ``In summary, despite 
efforts of the Afghan Government and the international 
community, Afghanistan remains a failing state. It could become 
a failed state.''
    What a contrast to the President's statement to the 
American public that the Taliban, al Qaeda, and their allies 
are on the run in Afghanistan.
    The situation in Afghanistan is intimately connected to 
events in Pakistan. The elections held in the wake of the 
Bhutto assassination appear to have been relatively free of 
manipulation and the army may be pulling back from its 
domination of Pakistani politics. Some assessments of the 
election indicate that popular support for extremist elements 
is marginal. Director McConnell and Secretary Gates testified 
recently that they believe that Pakistan's political leaders 
now perceive that the lawlessness prevailing in the Northwest 
Frontier Province, the Federally Administered Tribal Area 
(FATA), and parts of Baluchistan represents a potentially 
mortal threat to Pakistan.
    We need to understand from our witnesses how these 
developments might be translated into concrete gains against 
extremist elements in Pakistan and eliminating the sanctuary 
for the Taliban and al Qaeda along the Afghan border.
    Secretary Gates recently testified that Pakistan's 
preoccupation with preparing for traditional warfare against 
India leaves Pakistan's army ill-equipped and ill-trained for 
irregular warfare in those tribal regions along the Afghan 
border. What are the prospects for Pakistan adjusting its 
security priorities and capabilities to confront tribal and 
religious militants? Can Pakistan's newly victorious parties 
overcome their historic fragility and animosity to forge a 
lasting turn to stable parliamentary democracy that can adopt 
and enforce difficult policies?
    In his prepared statement for today's hearing, Director 
McConnell states that al Qaeda's central leadership, based in 
the Afghan-Pakistan border region, is ``its most dangerous 
component.'' He also states that the Intelligence Community 
(IC) sees indications that al Qaeda's global image is beginning 
to lose some of its luster. It's important to be clear about 
whether the Director believes that this trend is likely to be 
lasting and how it relates to the Taliban's strength in 
Afghanistan and al Qaeda's growing strength in northern and 
eastern Africa.
    Regarding Iraq, we need to understand the prospects for 
political reconciliation. The concern remains that, while the 
intensity of the violence has subsided, reconciliation, which 
was the purpose of the surge, is still halting and unsteady. 
That means that we may be merely postponing a resurgence of 
violence while training combatants for that resurgence.
    As Director McConnell's prepared statement indicates, the 
political gaps between Iraqi communities remain deep. Sunnis 
now cooperating with U.S. forces remain hostile towards the 
Shiites and the Shiites still look on the Sunni groups working 
with the U.S. forces against al Qaeda as ``thinly disguised 
insurgents,'' in Director McConnell's words, who remain 
committed to overthrowing the Shiite majority.
    On the Shiite side, we need to know what the IC's 
understanding is of the Shiite militias' intentions and plans 
and the degree of penetration by and dependence on Iran and its 
agents in Iraq, how many Quds Force personnel or other Iranian 
personnel are operating in Iraq and what they are doing.
    Director McConnell's prepared statement indicates that, 
despite pledges by senior Iranian officials, Iran continues to 
provide weapons, funding, and training to Iraqi Shiite 
militias.
    The Iraqi parliament approved a de-Baathification law, but 
its likely effects remain unclear. There have been reports, for 
example, that the law may actually lead to fresh rounds of 
purges of Sunnis from government posts. Fundamental hydrocarbon 
legislation remains stalled. A provincial elections law that 
must be passed before the critically needed elections in the 
provinces can be held has not been adopted. Amendments to the 
Constitution have not even been proposed.
    Turning to Iran's nuclear activities, the recent National 
Intelligence Estimate (NIE) concluded that Iran several years 
ago ceased work on warhead design and weaponization. More 
recently, in Senate testimony Director McConnell said the 
wording of the NIE led to the misperception that Iran has 
abandoned its efforts to acquire nuclear weapons. He emphasized 
that the other two critical elements of a weapons program, 
uranium enrichment and a ballistic missile delivery capability, 
continue and continue openly.
    Director McConnell further testified that the prospects for 
Security Council support for additional sanctions on Iran are 
good. We need to explore this issue carefully today, along with 
the Director's assessment of the meaning and significance of 
the International Atomic Energy Agency's (IAEA) new report on 
Iran's nuclear activities.
    I'm going to put the balance of my statement, particularly 
as it relates to North Korea and the Balkan region, in the 
record at this point.
    [The prepared statement of Senator Levin follows:]

                Prepared Statement by Senator Carl Levin

    I would like to welcome our witnesses for today's hearing on 
current and longer-term threats and intelligence challenges around the 
world. We are glad to have Director of National Intelligence (DNI) 
McConnell and Defense Intelligence Agency (DIA) Director General Maples 
appearing here today.
    This committee has a special responsibility to the men and women of 
our Armed Forces to be vigilant on intelligence programs because 
decisions on whether or not to use military force and the planning for 
military operations depend so heavily on intelligence.
    For instance, we face a growing threat in Afghanistan, with the 
President painting a rosy picture of the situation there for the 
American public. Recently, he said that in Afghanistan ``The Taliban, 
al Qaeda, and their allies are on the run,'' while on the other hand, 
recent independent reports by the Afghanistan Study Group and the 
Atlantic Council provide a very different assessment.
    Among the findings of these Afghanistan reports are the following:

         Efforts to stabilize Afghanistan are ``faltering.'' 
        The Afghanistan Study Group report finds that since 2002 
        ``violence, insecurity, and opium production have risen 
        dramatically as Afghan confidence in their government and its 
        international partners falls.''
         The Atlantic Council report states, ``Make no mistake, 
        North Atlantic Treaty Organization (NATO) is not winning in 
        Afghanistan.'' Instead, the security situation is ``a strategic 
        stalemate,'' with NATO and Afghan forces able to win any head-
        to-head confrontation with the Taliban, but not being able to 
        eliminate the insurgency so long as the Taliban enjoys safe 
        haven across the border with Pakistan.
         The anti-government insurgency threatening Afghanistan 
        ``has grown considerably over the last 2 years,'' according to 
        the Afghanistan Study Group. Last year was the deadliest since 
        2001 for U.S. and international forces. The Taliban are relying 
        increasingly on terrorism and ambushes, including over 140 
        suicide bombings in 2007. The Afghanistan Study Group report 
        also finds that ``the Taliban have been able to infiltrate many 
        areas throughout the country,'' intimidating and coercing the 
        local Afghan people.
         The Atlantic Council report concludes, ``In summary, 
        despite efforts of the Afghan Government and the international 
        community, Afghanistan remains a failing state. It could become 
        a failed state.''

    What a contrast to the President's statement to the American 
public. ``The Taliban, al Qaeda, and their allies are on the run in 
Afghanistan.''
    The situation in Afghanistan is intimately connected to events in 
Pakistan. The elections, held in the wake of the Bhutto assassination, 
appear to have been relatively free of manipulation, and the Army may 
be pulling back from its domination of Pakistani politics. Some 
assessments of the election indicate that popular support for extremist 
elements is marginal.
    Director McConnell and Secretary Gates have testified recently that 
they believe that Pakistan's political leaders now perceive that the 
lawlessness prevailing in the Northwest Frontier Province, the 
Federally Administered Tribal Area, and parts of Baluchistan represents 
a potentially mortal threat to Pakistan. We need to understand how 
these developments might be translated into concrete gains against 
extremist elements in Pakistan and eliminating the sanctuary for the 
Taliban and al Qaeda along the Afghanistan border.
    Secretary Gates recently testified that Pakistan's preoccupation 
with preparing for traditional warfare against India leaves Pakistan's 
Army ill-equipped and ill-trained for irregular warfare in those tribal 
regions along the Afghan border. What are the prospects for Pakistan 
adjusting its security priorities and capabilities to confront tribal 
and religious militants? Can Pakistan's newly victorious parties 
overcome their historic fragility and animosity to forge a lasting turn 
to stable parliamentary democracy that can adopt and enforce difficult 
policies?
    In his prepared statement for today's hearing, Director McConnell 
states that al Qaeda's central leadership, based in the Afghanistan-
Pakistan border region, is ``its most dangerous component.'' He also 
states that the Intelligence Community (IC) ``sees indications that al 
Qaeda's global image is beginning to lose some of its luster.'' It is 
important to be clear about whether the Director believes that this 
trend is likely to be lasting, and how it relates to the Taliban's 
strength in Afghanistan, and al Qaeda's growing strength in northern 
and eastern Africa.
    Regarding Iraq, we need to understand the prospects for political 
reconciliation. The concern remains that, while the intensity of the 
violence has subsided, reconciliation which was the purpose of the 
surge is still halting and unsteady. That means that we may be merely 
postponing a resurgence of violence while training combatants for that 
resurgence.
    As Director McConnell's prepared statement indicates, the political 
gaps between Iraqi communities remain deep. Sunnis now cooperating with 
U.S. forces remain hostile toward the Shiite, and the Shiites still 
look on the Sunni groups working with U.S. forces against al Qaeda as 
``thinly disguised insurgents'' (in Director McConnell's words) who 
remain committed to overthrowing the Shiite majority.
    On the Shiite side, we need to know what the IC's understanding is 
of the Shiite militias' intentions and plans, and the degree of 
penetration by, and dependence on, Iran and its agents in Iraq. How 
many Quds Force personnel, or other Iranian government agents, are 
operating in Iraq and what are they doing? Director Mcconnell's 
prepared statement indicates that, despite pledges by senior Iranian 
officials, Iran continues to provide weapons, funding, and training to 
Iraqi Shiite militants.
    The Iraqi Parliament approved a de-Baathification law but its 
likely effects remain unclear. There have been reports, for example, 
that the law may actually lead to fresh rounds of purges of Sunnis from 
government posts. Fundamental hydrocarbon legislation remains stalled. 
A provincial elections law that must be passed before critically needed 
elections can be held has not been adopted. Amendments to the 
Constitution have not yet even been proposed.
    Turning to Iran's nuclear activities, the recent National 
Intelligence Estimate (NIE) concluded that Iran several years ago 
ceased work on warhead design and weaponization. More recently, in 
Senate testimony, Director McConnell said the wording of the NIE led to 
the misperception that Iran had abandoned its efforts to acquire 
nuclear weapons. He emphasized that the other two critical elements of 
a weapons program--uranium enrichment and a ballistic missile delivery 
capability--continue openly.
    Director McConnell further testified that the prospects for 
Security Council support for additional sanctions on Iran are good. We 
need to explore this issue carefully today along with the Director's 
assessment of the meaning and significance of the International Atomic 
Energy Agency (IAEA) new report on Iran's nuclear activities.
    With respect to North Korea, many questions remain open, including 
whether North Korea had a highly-enriched uranium (HEU) program and, if 
so, whether North Korea has one today. Did the State Department Bureau 
of Intelligence and Research and other intelligence agencies review the 
notes of the October 4, 2002, meeting between U.S. and North Korean 
officials, where the North Koreans were confronted about an HEU 
program? If so, did the North Koreans admit that they had an HEU 
program, or was that ambiguous?
    Also, a recent unclassified report on North Korea assessed that 
North Korea could have produced up to 50 kilograms of plutonium, enough 
for at least half a dozen nuclear weapons. Since the 2002 unclassified 
estimate was one to two weapons, that means North Korea could have 
produced up to five more weapons after the Agreed Framework fell apart. 
We hope to hear from our witnesses today what the current unclassified 
estimate is of the number of weapons North Korea has produced from 2002 
to last year.
    The key issues are whether the North Korean government will provide 
the required transparency into all of its nuclear programs, 
capabilities, and proliferation activities, and ultimately, if North 
Korea is prepared to completely dismantle its nuclear weapons programs. 
The IC assessment of this is also critical.
    The Balkan region is again prominently in the news, with renewed 
signs of instability in Bosnia and with Kosovo's independence. Beyond 
the immediate regional danger of conflict and violence, there is the 
question of whether Russia will really follow through on threats to 
retaliate by fostering the independence of break-away regions of 
Georgia.
    Before turning to Senator Inhofe for his opening remarks, and our 
witnesses for their testimony, I would remind everyone that we have 
arranged for a closed session in S-407 following this open session if 
that is necessary,
    Senator Inhofe.

    Chairman Levin. Before turning to Senator Inhofe for his 
opening remarks and to our witnesses for their testimony, I 
would remind our colleagues that we have arranged for a closed 
session in S-407 of the Capitol following this open session if 
that is necessary.
    Senator Inhofe.

              STATEMENT OF SENATOR JAMES M. INHOFE

    Senator Inhofe. Thank you, Mr. Chairman. Let me join you in 
welcoming our witnesses this morning. I'm an admirer of each 
one of them. Your efforts and all of those of the intelligence 
services are essential to our Homeland defense, to the security 
of our national interests, and to the men and women of the 
Armed Forces who are deploying around the globe.
    Our Nation is currently making great demands on the 
intelligence system. I'm reminded, and you might remember this, 
Mr. Chairman, that when I came from the House to the Senate in 
1994 my predecessor was David Boren. He was the chairman of the 
Senate Select Committee on Intelligence (SSCI). I always 
remember, he called me up after I was elected to replace him 
and said that he had one big failure in his life and that was 
that they've really--this proliferated type of intelligence 
system that we have, where one group doesn't want the other 
group to compete with them and all of this.
    We've come a long way since then, but I keep talking to him 
with some regularity and he says that things are improving, but 
it was a problem. I can actually remember once when I was 
becoming familiar with the National Security Agency and what 
they're doing. They had some kind of a device that would go 
through maybe three feet of concrete. I said, that's exactly 
what the Federal Bureau of Investigation needs, and they 
implied: No, this is ours.
    So we've come a long ways since then, and I'm sure that 
David is impressed with some of the changes.
    I think the lessons we learned from the intelligence 
failures before September 11 lead to improvements in 
intelligence collections, the analysis, the coordination, and 
the information sharing. These improvements were required to 
provide our policymakers, our Armed Forces, and law enforcement 
officials with better tools with which to respond to a complex 
array of challenges.
    The reforms enacted since September 11 to strengthen our IC 
have made significant improvements. However, constantly 
evolving threats and technologies require continuous vigilance. 
I have seen the unclassified reports of some of the successes 
we've had of some of the terrorist threats that have been out 
there that our improved intelligence has been able to avoid. In 
fact, I read a list of those on the floor of the Senate 
yesterday. I think maybe it would be better for the classified 
version. I think the American people need to know that we've 
had a lot of successes, and nobody seems to talk about them. 
It's always a little awkward when someone, whether it's the 
President or anyone else, says we haven't had an attack since 
September 11. Well, that's true. Would there have been attacks? 
I think we all understand that there would have been, and I 
think we need to be talking about it.
    We have a little bit of a problem this morning, Mr. 
Chairman. I am the ranking member on the Environment and Public 
Works Committee, which starts at 10 o'clock. I have a required 
attendance, so I'll be in and out of this hearing. But there 
are certain areas that I want to stay for the first round, some 
interests that I have, and I'd like to have them addressed.
    Thank you.
    Chairman Levin. Thank you so much, Senator Inhofe.
    Director McConnell?

   STATEMENT OF HON. JOHN M. McCONNELL, DIRECTOR OF NATIONAL 
 INTELLIGENCE (DNI); ACCOMPANIED BY TIMOTHY E. LANGFORD, CUBA-
  VENEZUELA MISSION MANAGER, DNI; BENJAMIN A. POWELL, GENERAL 
 COUNSEL, DNI; ALAN R. PINO, NATIONAL INTELLIGENCE OFFICER FOR 
   MIDDLE EAST, DNI; AND THOMAS FINGAR, DEPUTY DIRECTOR FOR 
                         ANALYSIS, DNI

    Mr. McConnell. Thank you, Mr. Chairman, Senator Inhofe, and 
members of the committee. I'm delighted to be here. I'm pleased 
to be accompanied, of course, by Lieutenant General Mike 
Maples, the Director of the DIA. I submitted a longer 
classified, as you've mentioned, and unclassified statement, 
and that will of course cover more topics than I can in these 
brief remarks.
    Chairman Levin. Your statement will be made part of the 
record.
    Mr. McConnell. Thank you, sir.
    In discussing the threats facing our country, let me say 
that the judgments I will offer are based on the efforts of 
thousands of patriotic, highly skilled professionals, many of 
whom serve in harm's way. My sincere hope is that Congress and 
the American people see these men and women as the skilled 
professionals that they are, with the highest respect for our 
laws and values and dedicated to serving the Nation, with 
courage to seek and to speak the truth to the best of our 
abilities.
    Let me start with terrorism. I would like to highlight a 
few of the top counterterrorism successes of the last year, 
first to point out that there was no major attack, as has been 
noted, against the United States; also, there was no major 
attack against most of our European, Latin American, and East 
Asian allies throughout 2007. That was not an accident, as has 
been noted.
    In concert with Federal, State, and local law enforcement, 
our community helped disrupt cells plotting violent attacks. 
For example, last summer we and our allies unraveled terrorist 
plots linked to al Qaeda and its associates in both Denmark and 
in Germany. We were successful because we were able to identify 
key personalities in the planning. We worked with our European 
partners to monitor the plotters and disrupt their activities. 
I would note that one of the intended targets was a U.S. 
facility in Europe.
    In addition, our partners throughout the Middle East and 
elsewhere continue to aggressively attack terrorist networks 
involved in recruiting, training, and planning to strike 
American interests.
    Al Qaeda in Iraq suffered major setbacks last year. 
Hundreds of al Qaeda's leadership, operational, media, 
financial, logistics, weapons, and foreign fighter facilitator 
cadre have been neutralized. In addition, the brutal attacks 
unleashed by al Qaeda in Iraq and other al Qaeda affiliates 
against Muslim civilians have tarnished al Qaeda's self-styled 
image of the extremist vanguard.
    Are we at a tipping point? Have we witnessed the decline in 
this radical behavior? We don't know the answer to that 
question, but because of some of the recent setbacks suffered 
by al Qaeda we're watching this very closely.
    Nonetheless, al Qaeda remains the preeminent terrorist 
threat to the United States at home and abroad. Despite our 
successes, the group has retained or regenerated key elements 
of its capability, including top leadership, operational, 
middle level lieutenants, and de facto safe haven in Pakistan's 
border area with Afghanistan, known as the FATA.
    Al Qaeda's current efforts are to recruit and train 
operatives for terrorist operations spread from the Middle East 
to Europe and to the United States.
    Pakistani authorities who are our partners in this fight 
have helped us more than any other nation in counterterrorism 
operations, increasingly are determined in their 
counterterrorism performance, even during a period of 
heightened domestic transition exacerbated by the December 
assassination of Benazir Bhutto and the formation of a new 
government that will result from the elections on the 18th of 
February.
    In 2007, at least 865 Pakistani security forces and 
civilians were killed by suicide bombers. In addition, almost 
500 security forces and civilians were killed in armed clashes, 
for a total of over 1,300 people killed in Pakistan in 2007. 
The losses in Pakistan in 2007 exceeded the cumulative total 
for all years between 2001 and 2006.
    Al Qaeda's affiliates also pose a significant threat. Al 
Qaeda in Iraq remains al Qaeda's central most capable 
affiliate. We are increasingly concerned that, even as 
coalition forces inflict significant damage on al Qaeda inside 
Iraq, they could deploy resources outside Iraq, and of course 
they remain capable of attacks inside the country such as 
suicide bombings that kill scores of people.
    Al Qaeda's North African affiliate, al Qaeda in the Land of 
Islamic Magreb, based in Algeria, is active in North Africa and 
is expanding its target set to include U.S. and western 
interests. Other al Qaeda regional affiliates in the Levant, in 
the Gulf, Africa, and Southeast Asia maintained a lower profile 
in 2007, but they also remain capable of conducting strikes 
against U.S. interests.
    Let me turn to weapons of mass destruction (WMD) 
proliferation. The ongoing efforts of nation-states and 
terrorist groups to develop and acquire dangerous weapons and 
delivery systems constitute the second major physical threat to 
our country. After conducting missile tests and its first 
nuclear detonation in 2006, North Korea returned to the 
negotiating table last year. Pyongyang has reaffirmed its 
September 2005 commitment to full denuclearization. They shut 
down the nuclear facilities at Yongbyon and they're in the 
process of disabling those facilities.
    But the North missed its December 31, deadline for a full 
declaration of its nuclear programs. Although Pyongyang 
continues to deny uranium enrichment programs and proliferation 
activities, we believe North Korea engages in both. We remain 
uncertain about Kim Jong Il's commitment to full 
denuclearizations, as promised in the Six-Party Framework.
    I want to be very clear in addressing Iran's nuclear 
capability, as you alluded to, Mr. Chairman. First, there are 
three parts, as you noted, to an effective nuclear capability: 
fissile material, a method for delivery--ballistic missiles--
and then the technical design and weaponization of the warhead 
itself. As you noted, we assess in our recent NIE that Iran's 
technical design and weapons warhead weaponization work was 
halted in 2003 along with a covert military effort for the 
production of fissile material. However, the declared uranium 
enrichment effort that will enable the production of fissile 
material continues.
    Production of fissile material is the most difficult 
challenge in a nuclear weapons program. Also, as in the past, 
Iran continues its effort to perfect ballistic missiles that 
can reach as far as North Africa and into Europe. The earliest 
possible date that Iran could technically be capable of 
producing enough fissile material for a weapon is late 2009, 
although we consider that unlikely. As the estimate makes 
clear, Tehran halted its nuclear weapons design-related 
activities in response to international pressure, but is 
keeping open the option to develop nuclear weapons.
    If Iran's nuclear weapons design program, one of the three 
parts of the overall program, has already been reactivated or 
will be reactivated, it will be a closely guarded state secret 
in an attempt to keep us from being aware of its true status. 
The Iranians have never admitted the secret nuclear weapons 
design work which they halted in 2003.
    Iran also remains a threat to regional stability and to 
U.S. interests in the Middle East. This is because of the 
continued support for violent terrorist groups, such as Hamas 
and Hezbollah, and its efforts to undercut western actors, such 
as in Lebanon. Iran is pursuing policy intended to raise the 
political, economic, and human costs for any arrangement that 
would allow the United States to maintain presence and 
influence in the Middle East region.
    Let me turn now to a threat that hasn't been discussed much 
before this committee, the cyber threat. The United States' 
information infrastructure, including telecommunications and 
computer networks and systems and, most importantly, the data 
that reside on these systems, is critical to virtually every 
aspect of our modern life. Threats to our intelligence 
infrastructure are an important focus of this community. We 
assess that nation-states, which include of course Russia and 
China, long have had the technical capability to target U.S. 
information systems for intelligence collection. Think of it as 
data exploitation. Today those countries and others could 
target our information infrastructure for data degradation or 
data destruction. Data destruction, as opposed to data 
exploitation, is of increasing concern because of the potential 
impact on U.S. and the global economy should such perpetrators 
be successful.
    At the President's direction, last spring an interagency 
group was established to review the cyber threat to the United 
States. It was also tasked to identify options for countering 
the threats. The tasking was fulfilled with the issuance of the 
President's planning directive earlier this year. A program and 
budget has been submitted to Congress and this subject will be 
addressed in this budget cycle as we go throughout this year.
    Let me turn now to Iraq. The security situation in Iraq 
continues to show signs of improvement. Security incidents 
countrywide have declined significantly, to their lowest level 
since February 2006, 2 years ago. Monthly civilian fatalities 
nationwide have fallen by half in the past year.
    However, despite these gains, a number of internal factors 
continue to undermine Iraqi security. Sectarian distrust is 
strong throughout the Iraqi society. Al Qaeda in Iraq remains 
capable of conducting destabilizing operations and spectacular 
attacks, such as we have seen recently, despite disruptions to 
their network. Intercommunal violence, especially in southern 
Iraq, has spread beyond clashes between rival militia factions. 
While improving significantly over the past year, the ability 
of the Iraqi security force to conduct effective independent 
combat operations, independent of coalition operations, remains 
limited in the present timeframe.
    Bridging differences between the competing communities and 
providing effective governance are critical to achieving a 
successful state. While slow, progress is being made. We have 
seen some economic gains and quality-of-life improvements for 
the Iraqis, but improvements in security, in governance, and 
the economy are not ends in themselves. Rather, they're a means 
for building Iraqi confidence in the central government and 
easing the sectarian distrust.
    Let me just touch on Afghanistan. In 2007 the number of 
attacks in Afghanistan's Taliban-dominated insurgency exceeded 
that of the previous year, in part because NATO and Afghan 
forces undertook many more combat operations. Efforts to 
improve governance and extend economic development, similar to 
Iraq, were hampered by a lack of security in some areas in 
Afghanistan and limitations on government capacity.
    Ultimately, defeating the insurgency will depend heavily 
upon the government's ability to improve security, deliver with 
effective government, and expand development for economic 
opportunity. The drug trade, as was mentioned, is one of 
Afghanistan's greatest long-term challenges. The insidious 
effects of drug-related criminality continue to undercut the 
abilities of the government to assert its authority, develop 
strong rule of law-based systems for governance, and build the 
economy. The Taliban, operating in poppy-growing regions of the 
country, gain at least some financial support through their 
ties to the local opium traffickers.
    Let me touch briefly on China and Russia. Increases in 
defense spending have enabled the Russians to begin to reverse 
the deep deterioration in their capabilities that began before 
the collapse of the Soviet Union. However, the Russian military 
still faces significant challenges, for example in demographic 
trends and in health problems. In addition, conscription 
deferments erode available manpower and Russia's defense 
industry suffers from a lack of skilled personnel.
    China's military modernization program is shaped in part by 
the perception that a competent, modern military force is an 
essential element of great power status. Improvements in 
Chinese theater-range missile capabilities will put U.S. forces 
at greater risk from conventional weapons. In addition, Beijing 
seeks to modernize China's strategic nuclear forces to address 
concerns about the survivability of those systems.
    If present trends in the global development of counter-
space capabilities continue, both Russia and China will have 
increasing ability to target U.S. and intelligence satellites, 
as well as our command and control systems.
    Let me touch on Venezuela and Cuba. The referendum on 
constitutional reform in Venezuela last December was a stunning 
setback for President Chavez. The loss may slow Chavez's 
movement toward authoritarian rule. The referendum's outcome 
has given a psychological boost to his opponents. However, high 
oil prices probably will enable Chavez to retain the support of 
his constituents, continue coopting the economic elite, and 
stave off the consequences of his financial mismanagement. 
Without question, however, Chavez's policies and politics, 
those that he's pursuing, have Venezuela on a path for economic 
ruin.
    The determination of the Cuban leadership to ignore outside 
pressure for reform is reinforced by the more than $1 billion 
net annual subsidy that Cuba receives from Venezuela. We assess 
the political situation probably will remain stable in Cuba 
during at least the initial months following--now that Fidel 
Castro has handed off power to his brother Raul. However, 
policy missteps or the mishandling of a crisis by the Cuban 
leadership could spark instability in Cuba, raising the risk of 
mass migration.
    In conclusion, Mr. Chairman, issues I touched on and 
covered much more extensively in my statement for the record 
will confront us for the foreseeable future. The IC is fully 
committed to arming the policymakers, the warfighters, law 
enforcement officials, and Congress with the best intelligence 
that we can possibly provide.
    Thank you for the opportunity to speak this morning.
    [The prepared statement of Mr. McConnell follows:]

               Prepared Statement by J. Michael McConnell

                              INTRODUCTION

    Chairman Levin, Ranking Member McCain, and members of the 
committee, thank you for the invitation to offer my assessment of 
threats to U.S. national security. I am pleased to be accompanied today 
by Lieutenant General Michael Maples, Director of the Defense 
Intelligence Agency.
    The judgments that I will offer the committee in these documents 
and in my responses to your questions are based on the efforts of 
thousands of patriotic, highly-skilled professionals, many of whom 
serve in harm's way. I am pleased to report that the Intelligence 
Community (IC) is even better than it was last year as a result of the 
continuing implementation of reforms required by the Intelligence 
Reform and Terrorism Prevention Act of 2004. This statement is, in 
part, a product of our moving forward with the transformation of U.S. 
intelligence, including more innovative and rigorous analysis and wider 
and more far-reaching collaboration.
    You will see from the testimony that many of the key topics I touch 
on are not traditional ``national security'' topics. Globalization has 
broadened the number of threats and challenges facing the United 
States. For example, as government, private sector, and personal 
activities continue to move to networked operations and our digital 
systems add evermore capabilities, our vulnerability to penetration and 
other hostile cyber actions grows. The Nation, as we indicated last 
year, requires more from our IC than ever before and consequently we 
need to do our business better, both internally, through greater 
collaboration across disciplines and externally, by engaging more of 
the expertise available outside the IC.
    Many of the analytic judgments I present here have benefited from 
the increasing integration of collection and analysis. Our systematic 
effort to synchronize requirements across the national intelligence, 
defense, homeland security, and Federal law enforcement communities 
ensures collection assets will be better utilized and the collection 
community will be able to mount efforts to fill the gaps and needs of 
analysts. This more integrated community approach to analysis and 
collection requirements is part of the DNI's plan to transition the IC 
from a federation of independent intelligence organization to a 
reintegrated enterprise; the beginning results of this new approach are 
reflected in the more nuanced and deeper analysis of the challenges and 
threats facing the U.S.
    Against this backdrop, I will focus my statement on the following 
issues:

         The continuing global terrorist threat, but also the 
        setbacks the violent extremist networks are experiencing;
         The significant gains in Iraqi security since this 
        time last year have been accompanied by some recent political 
        momentum, but significant political and economic challenges 
        remain.
         The continuing challenges facing us in Afghanistan and 
        in Pakistan, where many of our most important interests 
        intersect;
         The persistent threat of weapons of mass destruction 
        (WMD)-related proliferation:

                 Despite halting progress towards 
                denuclearization, North Korea continues to maintain 
                nuclear weapons;
                 Despite the halt through at least mid-2007 to 
                Iran's nuclear weapons design and covert uranium 
                conversion and enrichment-related work, Iran continues 
                to pursue fissile material and nuclear-capable missile 
                delivery systems.

         The vulnerabilities of the U.S. information 
        infrastructure to increasing cyber attacks by foreign 
        governments, nonstate actors, and criminal elements;
         The growing foreign interest in counterspace programs 
        that could threaten critical U.S. military and intelligence 
        capabilities;
         Issues of political stability and of national and 
        regional conflict in Europe, the Horn of Africa, the Middle 
        East, and Eurasia;
         Growing humanitarian concerns stemming from the rise 
        in food and energy prices for poorer states;
         Concerns about the financial capabilities of Russia, 
        China,and OPEC countries and the potential use of their market 
        access to exert financial leverage to achieve political ends.

                               TERRORISM

    Let me start by highlighting a few of our top successes in the past 
year. Most importantly, there was no major attack against the United 
States or most of our European, Latin American, East Asia allies and 
partners. This was no accident.
    Last summer, for example, with our allies, we unraveled terrorist 
plots linked to al Qaeda and its associates in Denmark and Germany. We 
were successful because we were able to identify key plotters. We 
worked with our European partners to monitor the plotters and disrupt 
their activities. In addition, our partners throughout the Middle East 
and elsewhere continued to attack aggressively terrorist networks 
recruiting, training, and planning to strike American interests. The 
death in January of Abu Layth al-Libi, al Qaeda's charismatic senior 
military commander and a key link between al Qaeda and its affiliates 
in North Africa, is the most serious blow to the group's top leadership 
since the December 2005 death of then external operations chief Hamza 
Rabi'a.

                                AL QAEDA

    Al Qaeda in Iraq (AQI) suffered major setbacks last year, although 
it still is capable of mounting lethal attacks. Hundreds of AQI 
leadership, operational, media, financial, logistical, weapons, and 
foreign fighter facilitator cadre have been killed or captured. With 
much of the Sunni population turning against AQI, its maneuver room and 
ability to operate have been severely constrained. AQI's attack tempo, 
as measured by numbers of suicide attacks, had dropped by more than 
half by year's end after approaching all time highs in early 2007. We 
see indications that al Qaeda's global image is beginning to lose some 
of its luster; nonetheless, we still face multifaceted terrorist 
threats.
    Al Qaeda and its terrorist affiliates continue to pose significant 
threats to the United States at home and abroad, and al Qaeda's central 
leadership based in the border area of Pakistan is its most dangerous 
component. Last July, we published a National Intelligence Estimate 
titled, ``The Terrorist Threat to the U.S. Homeland,'' which assessed 
that al Qaeda's central leadership in the past 2 years has been able to 
regenerate the core operational capabilities needed to conduct attacks 
in the Homeland:

         Al Qaeda has been able to retain a safehaven in 
        Pakistan's Federally Administered Tribal Areas (FATA) that 
        provides the organization many of the advantages it once 
        derived from its base across the border in Afghanistan, albeit 
        on a smaller and less secure scale. The FATA serves as a 
        staging area for al Qaeda's attacks in support of the Taliban 
        in Afghanistan as well as a location for training new terrorist 
        operatives, for attacks in Pakistan, the Middle East, 
        Africa,Europe, and the United States.
         Using the sanctuary in the border area of Pakistan, al 
        Qaeda has been able to maintain a cadre of skilled lieutenants 
        capable of directing the organization's operations around the 
        world. It has lost many of its senior operational planners over 
        the years, but the group's adaptable decisionmaking process and 
        bench of skilled operatives have enabled it to identify 
        effective replacements.
         Al Qaeda's top leaders Osama Bin Laden and Ayman al-
        Zawahiri continue to be able to maintain al Qaeda's unity and 
        its focus on their strategic vision of confronting our allies 
        and us with mass casualty attacks around the globe. Although 
        security concerns preclude them from the day-to-day running of 
        the organization, Bin Laden and Zawahiri regularly pass 
        inspirational messages and specific operational guidance to 
        their followers through public statements.
         Al Qaeda is improving the last key aspect of its 
        ability to attack the U.S.: the identification, training, and 
        positioning of operatives for an attack in the Homeland. While 
        increased security measures at home and abroad have caused al 
        Qaeda to view the west, especially the U.S., as a harder 
        target, we have seen an influx of new western recruits into the 
        tribal areas since mid-2006.

    We assess that al Qaeda's homeland plotting is likely to continue 
to focus on prominent political, economic, and infrastructure targets 
designed to produce mass casualties, visually dramatic destruction, 
significant economic aftershocks, and/or fear among the population.

  CHEMICAL, BIOLOGICAL, RADIOLOGICAL, AND NUCLEAR THREAT FROM AL QAEDA

    We judge use of a conventional explosive to be the most probable al 
Qaeda attack scenario because the group is proficient with conventional 
small arms and improvised explosive devices (IEDs) and is innovative in 
creating capabilities and overcoming security obstacles. That said, al 
Qaeda and other terrorist groups are attempting to acquire chemical, 
biological, radiological, and nuclear weapons and materials. We assess 
al Qaeda will continue to try to acquire and employ these weapons and 
materials; some chemical and radiological materials and crude weapons 
designs are easily accessible, in our judgment.

                          AL QAEDA AFFILIATES

    Al Qaeda's affiliates from Africa to Southeast Asia also pose a 
significant terrorist threat. I will discuss the success we are having 
against al Qaeda in Iraq (AQI) as part of the larger discussion of the 
IC's analysis of the Iraq situation, but here I would like to highlight 
that AQI remains al Qaeda's most visible and capable affiliate. I am 
increasingly concerned that as we inflict significant damage on al 
Qaeda in Iraq, it may shift resources to mounting more attacks outside 
of Iraq.
    Although the ongoing conflict in Iraq will likely absorb most of 
AQI's resources over the next year, AQI has leveraged its broad 
external networks including some reaching into Europe--in support of 
external operations. It probably will continue to devote some effort 
towards honoring Bin Ladin's request in 2005 that AQI attempt to strike 
the United States, affirmed publicly by current AQI leader Abu Ayyub 
al-Masri in a November 2006 threat against the White House.

         AQI tactics, tradecraft, and techniques are 
        transmitted on the Internet, but AQI documents captured in Iraq 
        suggest that fewer than 100 AQI terrorists have moved from Iraq 
        to establish cells in other countries.

Al Qaeda in the Islamic Maghreb
    Al Qaeda's other robust affiliate, al Qaeda in the Lands of the 
Islamic Maghreb (AQIM), is the most active terrorist group in 
northwestern Africa. We assess it represents a significant threat to 
U.S. and European interests in the region. AQIM has continued to focus 
primarily on Algerian Government targets, but since its merger with al 
Qaeda in September 2006, the group has expanded its target set to 
include U.S., U.N., and other interests. AQIM likely got a further 
boost when the al Qaeda central leadership announced last November that 
the Libyan Islamic Fighting Group united with al Qaeda under AQIM's 
leadership. Two simultaneous suicide car bomb attacks in Algiers in 
December killed nearly 70 people and marked AQIM's highest profile act 
of violence to date. Improvements in AQIM's use of IEDs suggest the 
group is acquiring knowledge transmitted from extremists in Iraq.
    AQIM traditionally has operated in Algeria and northern Mali and 
has recruited and trained an unknown, but probably small, number of 
extremists from Tunisia, Morocco, Nigeria, Mauritania, Libya, and other 
countries. Although the degree of control that AQIM maintains over 
former trainees is unclear, the IC assesses some of these trainees may 
have returned to their home countries to plot attacks against local and 
western interests.
Other Affiliates Worldwide
    Other al Qaeda regional affiliates kept a lower profile in 2007, 
but we judge that they remain capable of conducting attacks against 
U.S. interests. al Qaeda is active on the Arabian Peninsula and 
presents a long-term threat to both western and host nation interests 
there, particularly in Saudi Arabia, UAE, and Yemen. In 2007, Saudi 
authorities detained over 400 extremists, highlighting both the threat 
and the Kingdom's commitment to combating it. We judge al Qaeda will 
continue to attempt attacks in the Arabian Peninsula, particularly in 
Saudi Arabia, Yemen, United Arab Emirates, and Bahrain.
    The IC assesses al Qaeda-associated groups and networks in Lebanon 
pose a growing threat to western interests in the Levant. In East 
Africa, the Ethiopian invasion of Somalia disrupted al Qaeda in East 
Africa (AQEA) operations and activities, but senior AQEA operatives 
responsible for the 1998 U.S. Embassy bombings and the 2002 attacks in 
Mombassa, Kenya, remain at large. The IC assesses Jemaah Islamiya in 
Indonesia and the Abu Sayyaf Group in the Philippines--which have 
historic links to al Qaeda and have killed over 400 people are the two 
terrorist groups posing the greatest threat to U.S. interests in 
Southeast Asia. The IC assesses that Pakistan-based Lashkar-e-Tayyiba 
and other Kashmir-focused groups will continue attack planning and 
execution in India. Shia and Hindu religious observances are possible 
targets, as are transportation networks and government buildings. We 
judge Kashmir-focused groups will continue to support the attacks in 
Afghanistan, and operatives trained by the groups will continue to 
feature in al Qaeda transnational attack planning.
                  but al qaeda's reputation is dimming
    The brutal attacks against Muslim civilians unleashed by AQI and 
AQIM and the conflicting demands of the various extremist agendas are 
tarnishing al Qaeda's self-styled image as the extremist vanguard. Over 
the past year, a number of religious leaders and fellow extremists who 
once had significant influence with al Qaeda have publicly criticized 
it and its affiliates for the use of violent tactics.

         Osama Bin Laden's public statement about Iraq in 
        October--in which he admitted that AQI made mistakes and urged 
        it to reconcile with other Iraqi insurgent groups provoked 
        controversy on extremist Internet discussion forums. Likewise, 
        deputy al Qaeda chief Ayman al-Zawahiri has been criticized by 
        supporters for perceived contradictions in his public 
        statements about HAMAS and softness toward Iran and the Shia.

                               HIZBALLAH

    The IC assesses that the 12 February death of Hizballah Jihad 
Council Chief Imad Mughniyah--who oversaw all Hizballah military, 
security, and terrorist operations will prompt retaliation against 
Israeli and potentially Jewish and U.S. interests. Hizballah has 
publicly blamed Israel for the operation but said that other ``arrogant 
powers,'' probably a reference to the United States, had sought to kill 
Mughniyah. Hizballah has the ability to attack almost worldwide with 
little warning.

                        THE ``HOMEGROWN'' THREAT

    Over the next year, attacks by ``homegrown'' extremists inspired by 
militant Islamic ideology but without operational direction from al 
Qaeda will remain a threat to the United States or against U.S. 
interests overseas. The spread of radical Salafi Internet sites that 
provide religious justification for attacks, increasingly aggressive 
and violent anti-Western rhetoric and actions by local groups, and the 
growing number of radical, self-generating cells in western countries 
that identify with violent Salafi objectives, all suggest growth of a 
radical and violent segment among the West's Muslim populations.Our 
European allies regularly tell us that they are uncovering new 
extremist networks in their countries.
    While the threat from such homegrown extremists is greater in 
Europe, the U.S. is not immune. The threat here is likely to be fueled 
in part by propaganda and mischaracterizations of U.S. foreign policy 
as harmful to Muslims, rather than by any formal assistance from al 
Qaeda or other recognized groups. The al Qaeda-propagated narrative of 
an ``us versus them'' struggle serves both as a platform and a 
potential catalyst for radicalization of Muslims alienated from the 
mainstream U.S. population.
    A small, but growing portion of al Qaeda propaganda, is in English 
and is distributed to an American audience--either in translated form 
or directly by English-speaking al Qaeda members like Adam Gadahn, the 
American member of al Qaeida who, in early-January, publicly urged 
Muslims to use violence to protest the President's Middle East trip. 
Bin Laden's September 2007 ``message to the American people'' and 
Zawahiri's May 2007 interview include specific U.S. cultural and 
historical references almost certainly meant to strike a chord with 
disaffected U.S. listeners.
    Disrupted plotting over the past 14 months in New Jersey and 
Illinois highlights the diverse threat posed by Homeland-based radical 
Muslims inspired by extremist ideology. A group of European and Arab 
Muslim immigrants arrested last May for planning to attack Fort Dix, 
NJ, used a groupmember's familiarity with the U.S. Army base to 
determine their target. In Illinois, the Federal Bureau of 
Investigation (FBI) arrested U.S. Muslim convert Derrick Shareef in 
December 2006 as he attempted to obtain weapons for a self-planned, 
self-executed terrorist attack against a shopping mall in Rockford.
    To date, cells detected in the United States have lacked the level 
of sophistication, experience, and access to resources of terrorist 
cells overseas. Their efforts, when disrupted, largely have been in the 
nascent phase, and authorities often were able to take advantage of 
poor operational tradecraft. However, the growing use of the internet 
to identify and connect with networks throughout the world offers 
opportunities to build relationships and gain expertise that previously 
were available only in overseas training camps. It is likely that such 
independent groups will use information on destructive tactics 
available on the Internet to boost their own capabilities.

    WEAPONS OF MASS DESTRUCTION PROLIFERATION: KEY STATES OF CONCERN

    In addition to terrorism, the ongoing efforts of nation-states and 
terrorists to develop and/or acquire dangerous weapons and delivery 
systems constitute major threats to the safety of our Nation, our 
deployed troops, and our friends. We are most concerned about the 
threat and destabilizing effect of nuclear proliferation. We also are 
concerned about the threat from biological and chemical agents.
    WMD use by most nation states is traditionally constrained by the 
logic of deterrence and by diplomacy, but these constraints may be of 
less utility in preventing the use of mass-effect weapons by terrorist 
groups. The time when only a few states had access to the most 
dangerous technologies has been over for many years. Technologies, 
often dual-use, circulate easily in our globalized economy, as do the 
scientific personnel who design and use them. The IC works with other 
elements of the U.S. Government on the safeguarding and security of 
nuclear weapons and fissile material, pathogens, and chemical weapons 
in select countries.
    We assess that some of the countries that are still pursuing WMD 
programs will continue to try to improve their capabilities and level 
of self-sufficiency over the next decade. We also are focused on the 
potential acquisition of nuclear, chemical, and/or biological weapons--
or the production technologies and materials necessary to produce 
them--by states that do not now have such programs, by terrorist 
organizations such as al Qaeda, insurgents in Iraq, and by criminal 
organizations, acting alone or via middlemen. We also are concerned 
about rogue or criminal elements willing to supply materials and 
technology--alone or with a network--without their government's 
knowledge.
    We are especially concerned about the potential for terrorists to 
gain access to WMD-related materials or technology. Many countries in 
the international community share these concerns. Therefore we are 
working closely with other elements of the U.S. Government to enhance 
the safety and security of nuclear weapons and fissile material and the 
detection of WMD materials.

           IRAN'S AND NORTH KOREA'S WMD AND MISSILE PROGRAMS

    The Iranian and North Korean regimes flout U.N. Security Council 
restrictions on their nuclear programs.
    Over the past year we have gained important new insights into 
Tehran's activities related to nuclear weapons and the community 
recently published a National Intelligence Estimate on Iranian intent 
and capabilities in this area. I want to be very clear in addressing 
the Iranian nuclear capability. First, there are three parts to an 
effective nuclear weapons capability:

        1. Production of fissile material
        2. Effective means for weapons delivery
        3. Design and weaponization of the warhead itself

    We assess in our recent National Intelligence Estimates on this 
subject that warhead design and weaponization were halted, along with 
covert military uranium conversion- and enrichment-related activities. 
Declared uranium enrichment efforts, which will enable the production 
of fissile material, continue. This is the most difficult challenge in 
nuclear production. Iran's efforts to perfect ballistic missiles that 
can reach North Africa and Europe also continue.
    We remain concerned about Iran's intentions and assess with 
moderate-to-high confidence that Tehran at a minimum is keeping open 
the option to develop nuclear weapons. We have high confidence that 
Iranian military entities were working under government direction to 
develop nuclear weapons until fall 2003. Also, Iranian entities are 
continuing to develop a range of technical capabilities that could be 
applied to producing nuclear weapons. Iran continues its efforts to 
develop uranium enrichment technology, which can be used both for power 
reactor fuel and to produce nuclear weapons. As noted, Iran continues 
to deploy ballistic missiles inherently capable of delivering nuclear 
weapons, and to develop longer-range missiles. We also assess with high 
confidence that even after fall 2003 Iran has conducted research and 
development projects with commercial and conventional military 
applications some of which would also be of limited use for nuclear 
weapons.
    We judge with high confidence that in fall 2003, Tehran halted its 
nuclear weapons design and weaponization activities, as well as its 
covert military uranium conversion and enrichment-related activities, 
for at least several years. Because of intelligence gaps, Department of 
Energy and the NIC assess with only moderate confidence that all such 
activities were halted. We assess with moderate confidence that Tehran 
had not restarted these activities as of mid-2007, but since they 
comprised an unannounced secret effort that Iran attempted to hide, we 
do not know if these activities have been restarted.
    We judge with high confidence that the halt was directed primarily 
in response to increasing international scrutiny and pressure resulting 
from exposure of Iran's previously undeclared nuclear work. This 
indicates that Iran may be more susceptible to influence on the issue 
than we judged previously.
    We do not have sufficient intelligence information to judge 
confidently whether Tehran is willing to maintain the halt of its 
nuclear weapons design and weaponization activities indefinitely while 
it weighs its options, or whether it will or already has set specific 
deadlines or criteria that will prompt it to restart those activities. 
We assess with high confidence that Iran has the scientific, technical, 
and industrial capacity eventually to produce nuclear weapons. In our 
judgment, only an Iranian political decision to abandon a nuclear 
weapons objective would plausibly keep Iran from eventually producing 
nuclear weapons and such a decision is inherently reversible. I note 
again that two activities relevant to a nuclear weapons capability 
continue: uranium enrichment that will enable the production of fissile 
material and development of long-range ballistic missile systems.
    We assess with moderate confidence that convincing the Iranian 
leadership to forgo the eventual development of nuclear weapons will be 
difficult given the linkage many within the leadership see between 
nuclear weapons development and Iran's key national security and 
foreign policy objectives, and given Iran's considerable effort from at 
least the late 1980s to 2003 to develop such weapons.
    We continue to assess with moderate-to-high confidence that Iran 
does not currently have a nuclear weapon. We continue to assess with 
low confidence that Iran probably has imported at least some weapons-
usable fissile material, but still judge with moderate-to-high 
confidence it has not obtained enough for a nuclear weapon. We cannot 
rule out that Iran has acquired from abroad--or will acquire in the 
future--a nuclear weapon or enough fissile material for a weapon. 
Barring such acquisitions, if Iran wants to have nuclear weapons it 
would need to produce sufficient amounts of fissile material 
indigenously--which we judge with high confidence it has not yet done.
    Iran resumed its declared centrifuge enrichment activities in 
January 2006, despite the 2003 halt in its nuclear weapons design and 
weaponization activities. Iran made significant progress in 2007 
installing centrifuges at Natanz, but we judge with moderate confidence 
it still faces significant technical problems operating them.

         We judge with moderate confidence that the earliest 
        possible date Iran would be technically capable of producing 
        enough highly enriched uranium (HEU) for weapon is late 2009, 
        but that is very unlikely.
         We judge with moderate confidence Iran probably would 
        be technically capable of producing enough HEU for a weapon 
        sometime during the 2010-2015 timeframe. INR judges Iran is 
        unlikely to achieve this capability before 2013 because of 
        foreseeable technical and programmatic problems. All agencies 
        recognize the possibility that this capability may not be 
        attained until after 2015.

    We know that Tehran had a chemical warfare program prior to 1997, 
when it declared elements of its program. We assess that Tehran 
maintains dual-use facilities intended to produce CW agent in times of 
need and conducts research that may have offensive applications. We 
assess Iran maintains a capability to weaponize CW agents in a variety 
of delivery systems.
    We assess that Iran has previously conducted offensive BW agent 
research and development. Iran continues to seek dual-use technologies 
that could be used for biological warfare.
    North Korea's nuclear weapons and missile programs threaten to 
destabilize a region that has known many great power conflicts and 
comprises some of the world's largest economies. North Korea has 
already sold ballistic missiles to several Middle Eastern countries and 
to Iran. We remain concerned North Korea could proliferate nuclear 
weapons abroad.
    While North Korea's military almost certainly could not defeat 
South Korea, it could inflict hundreds of thousands of casualties and 
severe damage on the South. Missile delivery systems, including several 
hundred deployed Scud and NoDong missiles, which were flight-tested in 
July 2006, add to the threat to South Korea and extend it to Japan, 
including to U.S. bases in both those countries. The north's October 
2006 nuclear test supports our previous assessment that it had produced 
nuclear weapons. The test produced a nuclear yield of less than one 
kiloton, well below the yield of most states' first nuclear tests. 
Prior to the test, North Korea produced enough plutonium for at least a 
half dozen nuclear weapons.
    The IC continues to assess that North Korea has pursued a uranium 
enrichment capability at least in the past, and judges with at least 
moderate confidence that the effort continues today.
    Pyongyang probably views its capabilities as being more for 
deterrence and coercive diplomacy than for warfighting and would 
consider using nuclear weapons only under certain narrow circumstances. 
We also assess that Pyongyang probably would not attempt to use nuclear 
weapons against U.S. forces or territory unless it perceived the regime 
to be on the verge of military defeat and risked an irretrievable loss 
of control.

         We assess that North Korea's Taepo Dong-2, which 
        failed in its flight-test in July 2006, probably has the 
        potential capability to deliver a nuclear-weapon-sized payload 
        to the continental United States. But we assess the likelihood 
        of successful delivery would be low absent successful testing.

                    NORTH KOREA AND SIX-PARTY TALKS

    North Korea conducted missile tests and its first nuclear 
detonation in October 2006. Since returning to the negotiating table 
last year, Pyongyang has reaffirmed its September 2005 commitment in 
principle to full denuclearization, shut down its nuclear facilities at 
Yongbyon, and begun the process of disabling those facilities. But the 
North missed a 31 December deadline for a full declaration of its 
nuclear programs, as had been agreed to last October. The regime 
appears stable, but persistent economic privation and natural disasters 
such as the severe floods last August--and uncertainty about succession 
arrangements create the potential for domestic unrest with 
unpredictable consequences.

               NUCLEAR AND COMPETITORA INDIA AND PAKISTAN

    In assessing the nuclear competition between India and Pakistan, we 
note that missile tests and new force deployments over the past 3 years 
have not affected the ongoing political dialogue. Although both New 
Delhi and Islamabad are fielding a more mature strategic nuclear 
capability, they do not appear to be engaged in a Cold War-style arms 
race for numerical superiority.

                       PAKISTAN NUCLEAR SECURITY

    We judge the ongoing political transition in Pakistan has not 
seriously threatened the military's control of the nuclear arsenal, but 
vulnerabilities exist. The Pakistan Army oversees nuclear programs, 
including security responsibilities, and we judge that the Army's 
management of nuclear policy issues--to include physical security--has 
not been degraded by Pakistan's political crisis.

                            THE CYBER THREAT

    The U.S. information infrastructure--including telecommunications 
and computer networks and systems, and the data that reside on them is 
critical to virtually every aspect of modern life. Therefore, threats 
to our IT infrastructure are an important focus of the IC. As 
government, private sector, and personal activities continue to move to 
networked operations, as our digital systems add .evermore 
capabilities, as wireless systems become even more ubiquitous, and as 
the design, manufacture, and service of information technology has 
moved overseas, our vulnerabilities will continue to grow.

                 STATE AND NON-STATE CYBER CAPABILITIES

    Our information infrastructure--including the 
internet,telecommunications networks, computer systems, and embedded 
processors and controllers in critical industries increasingly is being 
targeted for exploitation and potentially for disruption or 
destruction, by a growing array of state and non-state adversaries. 
Over the past year, cyber exploitation activity has grown more 
sophisticated, more targeted, and more serious. The IC expects these 
trends to continue in the coming year.
    We assess that nations, including Russia and China, have the 
technical capabilities to target and disrupt elements of the U.S. 
information infrastructure and for intelligence collection.Nation 
states and criminals target our government and private sector 
information networks to gain competitive advantage in the commercial 
sector. Terrorist groups--including al Qaeda, HAMAS, and Hizballah have 
expressed the desire to use cyber means to target the United States. 
Criminal elements continue to show growing sophistication in technical 
capability and targeting, and today operate a pervasive, mature on-line 
service economy in illicit cyber capabilities and services available to 
anyone willing to pay.
    Each of these actors has different levels of skill and different 
intentions; therefore, we must develop flexible capabilities to counter 
each. It is no longer sufficient for the U.S. Government to discover 
cyber intrusions in its networks, cleanup the damage, and take legal or 
political steps to deter further intrusions. We must take proactive 
measures to detect and prevent intrusions from whatever source, as they 
happen, and before they can do significant damage.
    At the President's direction, an interagency group reviewed the 
cyberthreat to the U.S. and identified options regarding how best to 
integrate U.S. Government defensive cyber capabilities; how best to 
optimize, coordinate and de-conflict cyber activities; and how to 
better employ cyber resources to maximize performance. This tasking was 
fulfilled with the January 2008 issuance of NSPD-54/HSPD-23, which 
directs a comprehensive national cybersecurity initiative. These 
actions will help to deter hostile action in cyber space by making it 
harder to penetrate our networks.

                              AFGHANISTAN

    In 2007 the number of attacks in Afghanistan's Taliban-dominated 
insurgency exceeded that of the previous year, in part because NATO and 
Afghan forces undertook many more offensive operations. Efforts to 
improve governance and extend development were hampered by a lack of 
security in some areas and a general lack of government capacity and 
competency. The ability of the Karzai government, NATO, and the United 
States to defeat the Taliban will determine the continued support of 
the Afghan people for the government and the international community. 
Afghan leaders also must deal with endemic corruption and pervasive 
poppy cultivation and drug trafficking. Ultimately, defeating the 
insurgency will depend heavily on the government's ability to improve 
security, deliver services, and expand development for economic 
opportunity.

                  SECURITY DETERIORATION IN THE SOUTH

    Although international forces and the Afghan National Army continue 
to score tactical victories over the Taliban, the security situation 
has deteriorated in some areas in the south,and Taliban forces have 
expanded their operations into previously peaceful areas of the west 
and around Kabul. The Taliban-dominated insurgency has expanded in 
scope despite operational disruption caused by International Security 
Assistance Force and Operation Enduring Freedom operations. The death 
or capture of three top Taliban leaders last year--their first high 
level losses--does not yet appear to have significantly disrupted 
insurgent operations.
    Continued progress has been made in expanding and fielding the 
Afghan National Army, which as of the end of 2007 reported attaining 70 
percent of its authorized 70,000 end strength. While this is an 
improvement, the shortage of international trainers in the field, high 
operational tempo, attrition, and absenteeism hamper efforts to make 
units capable of significant independent action. The Afghan National 
Police has approximately 90 percent of its authorized 82,000 end 
strength. While the National Police may have more forces throughout 
Afghanistan, corruption, insufficient training and equipment, and 
absenteeism hamper their effectiveness.

               CENTRAL GOVERNMENT AUTHORITY AND CAPACITY

    Kabul in 2008 must work closely with the national legislature, as 
well as provincial and tribal leaders, to establish and extend the 
capacity of the central government. The country faces a chronic 
shortage of resources and of qualified and motivated government 
officials at the national and local level.
    The drug trade is one of the greatest long-term challenges facing 
Afghanistan. The insidious effects of drug-related criminality continue 
to undercut the government's ability to assert its authority, to 
develop a strong, rule-of-law based system, and to rebuild the economy. 
Despite improved eradication and investigative efforts, poppy 
cultivation increased again last year. Opium poppy cultivation remains 
at or near 2004 record levels with over 200,000 hectares of land under 
cultivation in 2007.
    Both law enforcement and judicial capacity--although somewhat 
improved--remain limited, and Kabul remains constrained in its ability 
to deploy programs at the provincial and local levels. For farmers, 
opium poppy cultivation remains significantly more lucrative than wheat 
and other crops. The United Nations estimated the total farm-gate value 
of opium production in 2007 at $1 billion, with Helm and Province 
producing just over half of this total. The Taliban and other insurgent 
groups operating in poppy-growing regions gain at least some of 
financial support as a result of their ties to local opium traffickers. 
Drug money is an important source of income, especially at the local 
level where some Taliban commanders accrue their own operational 
funding.

                    IRAQ: TANGIBLE GAINS IN SECURITY

    The security situation in Iraq continues to show signs of 
improvement. According to Multinational Force-Iraq, as of the end of 
2007, security incidents countrywide and in the 10 Baghdad Security 
Districts have declined to their lowest levels since the February 2006 
Samarra Golden Mosque bombing; civilian violence has declined to pre-
Samarra levels; and monthly civilian fatalities nationwide have fallen 
by over half in the past year. We judge these security gains are the 
result of a combination of factors, including the success of tribal 
efforts in combating AQI, expanded Coalition operations, and the 
growing capabilities of the Iraqi security forces (ISF).

         We judge that organized tribal resistance to AQI--
        aided by expanded Coalition operations--has reduced AQI's 
        operational capabilities. Concurrently, decisions by major 
        elements of the Sunni insurgency to work with the Coalition 
        this year have weakened the insurgency by reducing the number 
        of Sunnis involved in violent resistance.
         Many tribal members and former insurgents have joined 
        ``Concerned Local Citizen'' groups or ``tribal awakening'' 
        movements that are cooperating with the coalition and Iraqi 
        Government. Some groups have indicated a desire to move beyond 
        providing security. They now want to promote economic 
        development and become political movements. They also are 
        endorsing the legitimacy of elections and political bargaining 
        to effect change at the provincial and national levels of 
        government.
         A steady decline in suicide attacks--the majority of 
        which we judge are conducted by foreign terrorists indicates 
        that coalition disruptions of AQI's foreign terrorists have 
        eroded AQI's capability to mount suicide operations.
         The ISF effectively deployed forces to Baghdad in 
        support of Operation Fardh al-Qanun this spring and, most 
        recently, to Al Basrah and Ad Diwaniyah. While showing dramatic 
        improvements, the ISF currently needs the Coalition for 
        planning, supporting, and executing sustained operations.

                     BUT SECURITY CHALLENGES REMAIN

    Despite these gains, a number of internal factors continue to 
undermine Iraq's security. Sectarian distrust is still strong 
throughout Iraqi society, and AQI remains capable of conducting 
destabilizing operations and spectacular attacks despite disruptions of 
its networks. AQI remains a potent force and the most active and 
capable of the Sunni extremist groups fighting coalition and Iraqi 
Government forces in Iraq. Also, since last August, intra-communal 
violence in southern Iraq has spread beyond rival militia factions as 
Shia groups compete for advantage.
    Many Sunnis who participate in local security initiatives retain a 
hostile attitude toward Shia parties that dominate the government, and 
some Shia leaders still view many anti-AQI Sunni groups as thinly 
disguised insurgents who are plotting to reverse the political process 
that brought the Shia to power.
    Security in southern Iraq probably will remain fragile in the 
coming months as rival Shia groups continue to compete violently for 
political power and economic resources. In Al Basrah, security remains 
tenuous. Security also is a problem in northern Iraq. Violence has 
increased in Mosul, Iraq's third largest city, as both Sunni resistance 
elements and AQI increasingly focus their activities in the area. The 
Iraqi Government will have to address Sunni Arab concerns over 
representation on the provincial councils, defeat AQI and the 
insurgents, and address Kurdish expansionism to improve security in 
northern Iraq.
    A number of factors continue to challenge the ISF's ability to 
conduct effective operations independent of Coalition forces.While 
improving significantly over the past year, ISF units remain hindered 
by shortages of personnel--especially trained leaders--and many units 
still rely on the Coalition for logistics support. Lastly, the return 
of Iraqi refugees and internally displaced persons to their former 
homes and neighborhoods as security improves could increase 
ethnosectarian tensions in mixed communities and create an additional 
strain on the Iraqi Government's ability to provide security and basic 
services to the general population.

         NEIGHBORS, FOREIGN FIGHTERS FURTHER CHALLENGE SECURITY

    Efforts by some of Iraq's neighbors to exert influence in Iraq also 
endanger Iraq's security. Iran primarily through the Islamic 
Revolutionary Guard Corps-Qods Force--continues to provide weapons, 
funding, and training support to certain Iraqi Shia militants despite 
reported commitments by senior Iranian officials to stop such support. 
Iran's provision of lethal aid to Iraqi Shia militants is designed to 
increase Tehran's influence over Iraq as well as ensure the United 
States suffers setbacks.
    Approximately 90 percent of all suicide attacks in Iraq are 
conducted by foreign terrorists with 50 to 80 foreign terrorists 
entering Iraq each month, although that number appeared to decline in 
the last part of 2007. Seventy to 80 percent of the foreign terrorists 
gain final entry into Iraq through Syria, many through the Damascus 
international airport.
    Syrian internal security operations have contributed to the 
reduction in the effectiveness of AQI's Syria-based foreign terrorist 
facilitation networks and in the number of foreign terrorists entering 
Iraq; nevertheless, Syria remains the primary transit hub for Iraq-
bound terrorists.

    POLITICS AND GOVERNANCE: CRITICAL COMPONENTS TO IRAQ'S SECURITY

    Improved security is a necessary but not sufficient condition to 
stabilize Iraq. Bridging differences among competing factions and 
communities and providing effective governance are critical for 
achieving a successful state, but moving ahead on that road has been 
tough for Iraq.
    Prime Minister Maliki's government had only limited success in 
delivering government services and improving the quality of life for 
Iraqis. Despite the beginning of a return of Iraqis who had fled 
because of violence, the political gaps between Iraqi communities, 
particularly the Arab Sunni and Shia, remain deep.
    Against this backdrop, Baghdad has managed to demonstrate forward 
momentum on key legislation. Since August, Iraqi political leaders have 
overcome months of contentious debate to pass key legislation because 
of strong U.S. pressure and a desire on the part of Iraqi political 
parties to show momentum. The Council of Representatives in the past 2 
months has passed a pensions law, de-Baathification reform, a 
provincial powers law, and an amnesty law.
    Baghdad continues to struggle to enact key legislation in two areas 
critical for political progress: hydrocarbons and provincial elections. 
Provincial elections must take place before October, according to the 
provincial powers law, but could face delays if legislative and 
bureaucratic issues are not resolved by the end of March. Negotiations 
on hydrocarbon laws continue to be stalled by disagreements between the 
central government and the Kurds over control of resources and revenue 
sharing. Progress also has been mixed on resolving outstanding 
constitutional reform issues and preparing to hold provincial 
elections.
    Gains on the economic front have improved the quality of life for 
Iraqis. Improved security has contributed to an increase in oil output 
from northern Iraq. The government also improved its performance last 
year in executing its budget, and the rate of inflation declined to 4.7 
percent in December 2007 after hovering around 50 percent for most of 
2006.
    Legislation and improvements in governance and the economy are not 
in themselves ends; rather they are critical means for restoring Iraqi 
confidence in the central government and for easing sectarian distrust, 
which are the greatest requirements for enabling reconciliation.

                                 TURKEY

    The Marxist inspired KGK maintains approximately 3,000-3,500 
guerrilla fighters in its northern Iraqi camps, about 1,000-2,000 
fighters inside Turkey, and several hundred in Iran and Syria and wants 
to establish a greater Kurdistan. The group has maintained a high-level 
of violence in Turkey a few months each year since it ended its 5-year 
old unilateral cease fire in 2004.
    Although the KGK has not previously targeted U.S. interests, the 
risk of retaliatory attacks against U.S. interests in Turkey and Iraq 
could grow.

                                  IRAN

    During the next year Supreme Leader Ali Khamenei and Iran's various 
conservative factions, despite some differences and in fighting, are 
expected to maintain control over apolitically stable if economically 
troubled Iranian state. However, recent public feuding between 
government factions over President Ahmadi-Nejad's handling of foreign 
and domestic policy issues specifically the nuclear issue and the 
economy--probably is making it more difficult for Khameneito avoid 
taking sides. The political discord probably has intensified as a 
result of international pressure, and as each side tries to position 
itself in advance of the Majles elections in March.

         Expediency Council Chairman Rafsanjani in November 
        called on the government to take the latest sanctions 
        seriously, according to press.
         Ahmadi-Nejad publicly has responded by calling his 
        critics''traitors'' and threatened to publicly reveal their 
        identities.
         In December, Rafsanjani publicly attacked Ahmadi-
        Nejad,likening the President's economic policies to those of 
        the Shah an extremely unusual and pointed critique.
         Iran is on its soundest financial footing since the 
        revolution with record high oil export revenue boosting foreign 
        exchange Reserves to more than $70 billion. Despite the 
        positive financial outlook, Iran's economy is plagued by the 
        twin problems of high inflation and unemployment, which are 
        Iranians' top complaints. Ahmadi-Nejad's populist policies have 
        reduced unemployment marginally, but at the expense of rising 
        inflation, which his political rivals might try to exploit in 
        the upcoming Majles elections.

    Iran remains a threat to regional stability and U.S. interests in 
the Middle East because of its continued support for violent groups, 
such as HAMAS and Hizballah, and efforts to undercut pro-Western 
actors, for example in Lebanon. Tehran's leadership seeks to preserve 
Iran's Islamic revolutionary government, sovereignty, stability, and 
territorial integrity while expanding Iran's influence and leadership 
in the region and the Islamic world.
    Iran also is enhancing its ability to project its military power 
primarily with ballistic missiles and naval power--with the ultimate 
goal of dominating the Gulf region and deterring potential adversaries. 
It seeks a capacity to disrupt Gulf shipping, especially in the Strait 
of Hormuz, and thus the operations and reinforcement of U.S. forces in 
the region potentially intimidating regional allies into withholding 
support for U.S. policy. Iran's growing inventory of ballistic and 
anti-ship cruise missiles is a key element in its efforts to assert its 
influence.
    Iranian leadership perceptions of a favorable environment are 
driving its foreign policy to expand Tehran's influence and leadership 
in the region and the Islamic world and to undermine U.S. influence, 
which it perceives as inimical to Iran's clerical regime. To achieve 
its regional aims and mitigate threats, Iran seeks to develop a sphere 
of influence based on diplomatic and economic relations, religious 
affinities, and shared anti-U.S. sentiments. While Tehran seeks better 
relationships with Shia populations worldwide, it continues to be 
especially strident in denying Israel's right to exist.
    Whether courting other governments or Muslim citizens, Iranian 
leaders seek political allies and economic partners as well as 
religious converts. Moreover, Tehran probably judges that local 
surrogates--usually Shia allies or proxies cultivated over many years--
can promote Iran's interests.
    In Afghanistan, Iran likely will continue to focus on political 
activities, reaching out to alternative power centers, and challenging 
the U.S.-led Coalition. Iranian officials probably will increase 
contact with various militias, political oppositionists, and religious 
leaders in Afghanistan and continue to provide lethal aid to groups and 
individuals who might be able to influence events in Iran's favor 
should the Karzai government falter or turn against Iran. We assess 
Iran has provided weapons to some Taliban commanders. NATO forces last 
September interdicted a vehicle convoy from Iran that contained 
weapons, including advanced IEDs, destined for the Taliban.

         In the Levant, Iranian security concerns, particularly 
        vis-a-vis Israel and the United States, and ambitions to become 
        adominant regional player, loyalty to allies, and concern for 
        Lebanese Shia probably are driving Tehran's relations with 
        Syria, Hizballah, and other regional groups. Over the longer 
        term, differences in Iranian and Syrian goals could limit their 
        cooperation, but barring significant changes in threat 
        perceptions by either Syria or Iran--Tehran probably will 
        continue providing military support to Syria.
         In Lebanon, Tehran seeks to build Iran's and 
        Hizballah's influence to the detriment of other Lebanese 
        communities and U.S. and Israeli interests. To enhance its role 
        as the leader of resistance to Israel, Iran will increase its 
        support to Palestinian terrorist groups, including HAMAS.

                                PAKISTAN

    Pakistan is a critical partner in U.S. counterterrorism efforts,but 
continues to face an array of challenges complicating its effectiveness 
against al Qaeda and other radical Islamic elements operating in the 
country. These challenges include coping with an unparalleled level of 
suicide attacks ordered by Pakistan-based militants, many of whom are 
allied with al-Qaeda. At least 865 security forces and civilians were 
killed by suicide bombings and IEDs in 2007. Four hundred ninety-six 
security forces and civilians also were killed in armed clashes in 2007 
to make a total of 1,360 killed in 2007. Total casualties in 2007 
including the number of injured security forces and civilians exceeded 
the cumulative total for all years between 2001 and 2006.
    Pakistan is establishing a new modus vivendi among the Army, 
President Musharraf, and elected civilian leaders now that Musharraf 
has stepped down as Army chief. These civilians, including the leaders 
of the Pakistan People's Party Parliamentarians (PPPP) and the Pakistan 
Muslim League-Nawaz (PML-N) who captured the largest vote shares on the 
parliamentary and provincial elections on 18 February, will seek some 
influence over the country's counterterrorism policies and cooperation 
with the United States. Pakistani authorities are increasingly 
determined to strengthen their counterterrorism performance, even 
during a period of heightened political tension that we expect to 
continue over the next year.
    Radical elements in Pakistan have the potential to undermine the 
country's cohesiveness. The terrorist assassination of former Prime 
Minister Benazir Bhutto could embolden Pashtun militants, increasing 
their confidence that they can strike the Pakistani establishment 
anywhere in the country.
    Over the long-term, the killing of Bhutto weakens the political 
party in Pakistan with the broadest national reach and most secular 
orientation, the PPPP. However, sympathetic voters gave the party the 
largest number of Assembly seats in the recently held elections. The 
PPPP now must craft a coalition government with other parties, some of 
which, like the PML-N, have signaled more confrontational stances 
toward president Musharraf than has the PPPP.
    The Pakistani government's current plans will require intensified 
and sustained efforts to orchestrate the administrative, economic, 
educational, legal, and social reforms required to defeat Islamic 
extremism and militancy. Pakistan's law and order problems arising from 
tribal and religious militancy can be effectively addressed in the 
long-term only if police and paramilitary forces can more reliably 
provide justice and border security. All of these administrative 
reforms require effective political leadership focused on improving the 
capabilities of Pakistani institutions for effective governance and 
development of economic opportunity.

                                 SYRIA

    The regime in Damascus continues to undermine Lebanon's sovereignty 
and security through its proxies; to harbor and support terrorists and 
terrorist organizations opposed to progress on peace talks; and to 
allow terrorists and criminals to cross its borders into Iraq and 
Lebanon. As I noted previously, Syria's efforts to stop the flow of 
foreign fighters through Syria into Iraq has improved in recent months 
but is uneven over the past year.
    Since the assassination of Rafiq Hariri in 2005, eight additional 
political leaders or officials have been killed in Lebanon in an effort 
to intimidate 14 March Coalition figures and alter the political 
balance in the Lebanese legislature. The Syrian regime, Hizballah, and 
pro-Syrian opposition elements in Lebanon have attempted to stymie 
international efforts to bring to justice those responsible for the 
Hariri assassination and disarm militia groups which constitute a 
challenge to Lebanese security and sovereignty. We anticipate that 
Syria and its supporters will continue to manipulate political 
developments in Lebanon through violence, intimidation, and refusal to 
work within constitutional parameters.
    Syria continues its support of Hizballah as that group seeks to 
rearm against Israel and advance its political agenda in Lebanon at the 
expense of the legitimate government. Damascus continues to support 
Palestinian rejectionist groups, including HAMAS, the Palestine Islamic 
Jihad, and the Popular front for the Liberation of Palestine-General 
Command. These organizations continue to base their external leadership 
in Syria, and despite repeated demands from the international 
community, Syria refuses to expel them or their leaders from their 
safe-haven in Damascus.

                                LEBANON

    In Lebanon, international efforts, to ensure free, fair, and 
constitutional presidential elections, have been impeded by 
destabilizing actions of Syria, Iran, and their Lebanese proxies.
    Lebanese Armed Forces (LAF) Commander Michel Sulayman has emerged 
as the prospective consensus candidate to become the country's next 
president; but Hizballah and the other pro-Syrian opposition parties 
insist on further concessions from the ruling Coalition before agreeing 
on the compromise. Even if the presidency is decided peacefully, issues 
such as the formation of the new government, naming of a prime 
minister, and the prospects for a U.N. tribunal investigating the 
assassination of former Prime Minister Hariri will be contentious.

         Since November 2006, a Minister, a deputy chief of the 
        LAF, and several pro-government legislators have been killed in 
        a campaign of intimidation deepening fear among the Lebanese 
        people that Syria, Iran, and their Lebanese cohorts will 
        prevent Lebanon from asserting their political and economic 
        independence.
         The pro-Syrian opposition has interfered with the 
        government's implementation of U.N. Security Council 
        resolutions. In violation of UNSC Resolution 1701, weapons and 
        fighters continue to flow across Lebanon's borders to Hizballah 
        and other terrorist organizations.

    In southern Lebanon more than 13,000 United Nations Interim Force 
in Lebanon (UNIFIL) peacekeepers and the LAFs patrol Hizballah's 
stronghold. As recently as January, militants launched rockets into 
northern Israel from inside the UNIFIL zone and a roadside bomb killed 
six peacekeepers last June. Many former militias in Lebanon are 
reconstituting, rearming, and retraining their fighters. The increased 
political and sectarian tension also raises the potential for civil war 
within the country. Lastly, militant groups, some associated with al 
Qaeda, continue to threaten Lebanese internal security.

                        PALESTINIAN TERRITORIES

    Despite progress toward initiating formal peace talks made in 
Annapolis last November, concern persists over the Palestinian 
Authority's ability to deliver the security demanded by Israel and to 
win popular support for its positions. President Abbas and other 
moderates remain vulnerable to actions by HAMAS and other groups aimed 
at subverting an agreement. The intra-Palestinian schism between Abbas 
and HAMAS has escalated since HAMAS' takeover of Gaza last summer.
    HAMAS feels increased pressure over a weakening economic situation 
and an accelerating humanitarian crisis in the Gaza Strip; however, the 
group remains fairly unified, especially its military wing, and in 
charge in the Gaza Strip where it controls all PA facilities. HAMAS 
continues to curtail freedoms and to harass Fatah members.
    In the West Bank, we see signs of progress by Fatah,including steps 
to reorganize the security sector, the return of PA customs revenues 
collected by Israel, renewed security and law enforcement cooperation 
with Israeli forces in taking more effective action against HAMAS, and 
progress by PA security forces in establishing security in Nablus and 
other areas.

                              SAUDI ARABIA

    In Saudi Arabia, the long-term challenge from Islamic extremism has 
been checked for now, and the government benefits from steady, oil 
price-driven economic growth. Saudi security forces have achieved 
notable successes against al Qaeda networks inside the Kingdom since 
2003, killing or capturing al Qaeda's original Saudi-based leadership 
and degrading its manpower, access to weapons, and operational 
capability.
    Although Riyadh also has made strides against key supporters and 
facilitators of extremist attacks in Iraq, Saudi Arabia remains a 
source of recruits and finances for Iraq and Levant-based militants and 
Saudi extremists constitute the largest share of foreign fighters and 
suicide bombers in Iraq.

                           RUSSIA AND EURASIA

    Let me turn now to Russia and Eurasia. In March, Russia is set to 
reach what many anticipated would be an important milestone the first 
on-schedule change in leadership since communism and the first 
voluntary transfer of power from one healthy Kremlin leader to another. 
That milestone has been clouded, however, by President Putin's declared 
readiness to serve as prime minister under his hand-picked successor, 
Dmitry Medvedev, a move that raises questions about who will be in 
charge of Russia after Putin's presidential term expires in May. Coming 
at a time of uncertainty about Russia's direction, the Medvedev-Putin 
``cohabitation'' raises questions about the country's future and the 
implications for Western interests.
    While many of the essential features of the current system are 
likely to endure, including weak institutions, corruption, and growing 
authoritarianism, we will be alert for signs of systemic changes such 
as an indication that presidential powers are being weakened in favor 
of a stronger prime minister.

                      ELEMENTS OF RUSSIA'S REVIVAL

    We judge the Russian economy will continue to expand under a new 
leadership, although at a slower rate than over the last 8 years, given 
capacity constraints, the slow pace of institutional change, the impact 
of real ruble appreciation, and developments in the international 
economy. Negative longer-term demographic challenges loom and 
investment will remain a significant constraint, particularly in the 
energy sector.
    Other elements of Russian national power--from trade and energy, to 
diplomatic instruments and military and intelligence capabilities are 
on a path to grow over the next 4 years. For example, Russia is 
positioning to control an energy supply and transportation network 
spanning from Europe to East Asia. Aggressive Russian efforts to 
control, restrict or block the transit of hydrocarbons from the Caspian 
to the west--and to ensure that east-west energy corridors remain 
subject to Russian control--underscore the potential power and 
influence of Russia's energy policy.
    The Russian military has begun to reverse a long, deep 
deterioration in its capabilities that started before the collapse of 
the Soviet Union. Although determined that defense spending not harm 
Russia's economic performance, Putin has been committed to increases 
for defense commensurate with GDP growth that has averaged just under 7 
percent this decade. By 2006 the military had significantly increased 
the number of high-readiness units from 1999 levels, ramped up ground 
forces training--including mobilization exercise activity--and begun to 
man its high-readiness units with longer-term ``contract'' personnel 
rather than conscripts.
    Moscow also is making more use of its strengthened armed forces. A 
growing number of exercises with foreign militaries and an increased 
operational tempo in the North Caucasus Military District, often 
focusing on potential Georgian contingencies, are designed primarily to 
demonstrate regional dominance and discourage outside interference. 
Russia has used widely publicized missile launches and increased long-
range aviation training flights to the Pacific, Atlantic, and Arctic 
Oceans to showcase Russia's continued global reach and military 
relevance.
    The military still faces significant challenges, and recent 
activity does not approach Soviet era operations. Demographic, health 
problems, and conscription deferments erode available manpower. 
Strategic nuclear forces remain viable, but Russia's defense industry 
suffers from overcapacity, loss of skilled and experienced personnel, 
lack of modern machine tools, rising material and labor costs, and 
dwindling component suppliers.

                      EURASIA AND BALKANS IN FLUX

    The other states of Eurasia remain in a state of flux. Unresolved 
conflicts in the separatist Georgian regions of Abkhazia and South 
Ossetia will remain potential flashpoint seven if Russia in response to 
Western recognition of Kosovo does not follow through with its implicit 
threat to recognize the two regions as independent. President 
Saakashvili's reelection in January will help renew his democratic 
credentials and leadership mandate.
    Elsewhere in the Caucasus, the stalemated Nagorno-Karabakh conflict 
between Azerbaijan and Armenia continues to produce dozens of 
casualties annually along the Line-of-Contact. Moreover, Russia's 
recent suspension of its conventional Forces in Europe obligations 
could lead to similar suspensions by Azerbaijan and Armenia and a 
subsequent arms race.
    Ukraine will continue to experience an unsettled domestic political 
situation for months to come. The struggle for power between various 
factions, however, has remained within the political system since the 
Orange Revolution, decreasing the possibility of violence.
    Prospects for major political change in Belarus are dim over the 
next year. Lukashenko's populist rhetoric, image as the defender of 
Belarus, and ability to keep the economy stable have maintained his 
high popularity. Opposition efforts to promote a pro-Western democratic 
agenda and build support for his ouster have gained little traction.
Central Asian Trends
    Central Asia remains fertile ground for radical Islamic sentiment 
and movements, due to socioeconomic and other factors. In Uzbekistan, 
President Karimov is intent on retaining firm control, but faces 
increased public dissatisfaction over a weakened economy and higher 
commodity prices. He has already demonstrated the willingness to use 
force against his people and could move quickly to suppress protests. 
Kyrgyzstan and Tajikistan lack the energy resources of other Central 
Asian states and have weak economies, but appear relatively stable for 
now. In the last year, Turkmenistan has shown progress on human rights 
and has begun to expand contacts with the outside world, but is still 
recovering from years of isolation.
    We judge that the Balkans will remain unsettled in 2008 as Kosovo's 
drive for independence from Serbia comes to a head and inter-ethnic 
relations in Bosnia worsen. Kosovo leaders have now declared 
independence, a move that could trigger confrontation with rejectionist 
Serbs living in northern Kosovo and some retaliatory measures by 
Belgrade.
    Inter-ethnic violence that brings about intervention by NATO-led 
forces is possible, especially if Serbs take provocative steps to block 
Pristina's authority, and any violence could spill over to neighboring 
states. However Kosovo's status is resolved, ethnic Albanian minorities 
in Macedonia and southern Serbia are likely to continue pressing for 
greater autonomy, and ethnic Albanian extremists could attempt to 
exploit public discontent and use small-scale violence to rally support 
for unification with Kosovo. Serbian officials say they will not 
intervene with the Serbian Army in Kosovo, but they have warned of 
political and economic responses that would probably harden Kosovo 
Serb's rejectionism of independence and hinder Kosovo's economic 
development.
    Kosovo's independence could exacerbate problems in Bosnia, where 
ethnic Serb leaders have warned of public protests and civil unrest in 
response. Fundamental differences between Bosniak and Bosnian Serb 
leaders over the ultimate structure of a multi-ethnic Bosnian state, 
fueled by increasingly strident ethnic rhetoric over the past year, 
have stymied most reforms required to keep Bosnia on a stabilizing path 
toward closer ties with the EU and NATO. However, the EU recently 
initialed a Stabilization and Association Agreement with Sarajevo. The 
international community presence in Bosnia is set to decline further in 
2008. We judge the probability of interethnic violence is low absent a 
move by Bosnia's Serbentity, the Republika Srpska, toward secession. 
Any violence would put pressure on U.S. and NATO forces in the region 
to assist.

                                 CHINA

    China sees itself as a regional power with global interests.Its 
strategic priorities focus on sustaining economic growth and political 
stability, partly as means to reinforce China's status as a great power 
and to uphold its territorial integrity. Beijing sees a peaceful 
external environment as vital to achieving these goals. As a result, 
China's global engagement is not driven by Communist ideology or 
military expansionism, but instead by a need for access to markets, 
resources, technology and expertise, and a desire to assert its role in 
the international community.

         All these goals have been reflected over the past few 
        years in Beijing's expanded engagement with Africa and Latin 
        America. China's efforts there have largely focused on gaining 
        greater access to natural resources--especially oil--but 
        China's involvement in these regions also helps promote its 
        regional and global influence by burnishing China's image as a 
        leader of the developing world. For example, Beijing has 
        boosted its participation in African peacekeeping operations, 
        most notably in Sudan.
         China's engagement in these regions, however, often 
        overlooks the tendency of some developing world leaders to 
        engage in human rights abuses or proliferation behavior--thus 
        providing disincentives for those leaders to alter such 
        behaviors. In addition, Beijing still engages in some 
        activities--including arms sales--that could contribute to 
        instability in Africa or Latin America. China's arms sales in 
        the Middle East are also destabilizing and a threat to U.S. 
        forces, while missile sales to Iran pose a threat to U.S. 
        forces in the Persian Gulf.

    Public statements by Chinese leaders indicate that Beijing 
perceives itself as being in the midst of a 20-year ``window of 
opportunity'' favorable to China's growth, development, and rise in 
influence. As a result, Beijing is seeking a constructive relationship 
with the U.S. and the rest of the world, which will allow China to 
fully capitalize on a favorable strategic environment. Indeed, Chinese 
officials consistently emphasize the need to seek cooperative relations 
with Washington, because conflict with the United States would risk 
derailing China's economic development. They also seek to alleviate 
international concerns about China's strategic intentions. As China's 
influence grows, however, Beijing probably will increasingly expect its 
interests to be respected by other countries. This will be especially 
true within East Asia, as Beijing tries to leverage its growing 
influence into a greater leadership role in the region.
    The Taiwan presidential election scheduled for 22 March, coincides 
with an internal referendum on membership in the U.N. Outgoing 
President Chen Shui-bian is seeking to affinn Taiwan's sovereignty and 
separate identity from the mainland. Beijing is attempting to use 
political and economic levers to deter what it sees as Taiwan's moves 
toward independence, but Chinese leaders say they are prepared for 
military contingencies, and have occasionally cited Beijing's 
2005''Anti-Secession Law,'' which authorizes the use of force if 
Beijing's leaders deem it necessary.

                 DOMESTIC STABILITY, ECONOMIC CONCERNS

    Notwithstanding China's external goals, the leadership is focused 
on threats to domestic stability. President Hu Jintao's domestic policy 
agenda is an attempt to address some of the underlying causes of social 
discontent, which has erupted in local demonstrations, by focusing on 
more balanced economic opportunity, environmental protection, expanded 
social services, and rule of law while strengthening the Communist 
Party's hold on power. Chinese leaders rely on security forces to clamp 
down on non-governmental organizations, dissidents, and religious 
groups viewed as threats to the Party's power. Implementation of Hu's 
program will require a major shift of resources to the countryside, 
greater accountability of provincial leaders to Beijing, and stronger 
efforts to root out corruption--all of which require overcoming 
substantial obstacles or taking significant political risks.
    China's impressive economic growth--it is the world's second 
largest economy--masks significant distortions and risks, including a 
rigidly controlled currency that contributes to excess liquidity, 
wasteful investment; government policies that favor exports over 
domestic consumption; and a state-run banking system slowly recovering 
from a series of credit problems. China's demographic problem of an 
aging population, high incidence of chronic and infectious disease, 
environmental degradation, and an increasing energy crunch are likely 
to slow economic growth over the long-term. A sudden and sharp slowdown 
in China could exacerbate vulnerabilities in the global economy; 
hardest hit would be its neighbors who sell about 50 percent of their 
goods to China and commodity producers who have enjoyed high prices and 
expanding export volumes because of China's rising demand for raw 
material, metals, and food.

                 PEOPLE'S LIBERATION ARMY MODERNIZATION

    The People's Liberation Army continues to develop a wide range of 
systems that increasingly could put U.S. and allied forces and bases in 
the region at risk. China's military modernization program is driven by 
the perception that a competent, modern military force is an essential 
element of the''great power'' status to which Chinese leaders aspire. 
We judge that any Chinese regime, even a democratic one, would have 
similar goals.
    China continues to develop and field conventional theater-range 
ballistic and cruise missile capabilities that will put U.S. forces and 
regional bases throughout the Western Pacific and Asia at greater risk. 
China also is developing more capable long-range conventional strike 
systems and short- and medium-range ballistic missiles with terminally 
guided maneuverable warheads that could be used to attack U.S. naval 
forces and airbases. China's arms sales in the Middle East are 
destabilizing and a threat to U.S. forces, while missile sales to Iran 
also pose a threat to U.S. forces in the Persian Gulf.
    In addition, counter-command, control, and sensor systems to 
include communications satellite jammers and anti-satellite weapons, 
are among Beijing's highest military priorities.
    Beijing seeks to modernize China's strategic forces in order to 
address concerns about the survivability of those systems in the face 
of foreign advances in strategic reconnaissance, precision strike and 
missile defenses. China's nuclear capabilities in terms of range, 
lethality, and survivability will increase rapidly over the next 10 
years.

                        THREATS TO SPACE SYSTEMS

    Potential foreign adversaries arc aware of the increasing U.S. 
reliance on space systems and the advantages these systems provide to 
U.S. military and intelligence operations. Over the last decade, the 
rest of the world has made significant progress in developing 
counterspace capabilities. I expand on this threat in my classified 
statement for the record.

                             LATIN AMERICA

    The gradual consolidation of democracy remained the dominant trend 
over the last year in Latin America, but a small group of radical 
populist governments continues to project a competing vision that 
appeals to many of the region's poor. Indeed, the persistence of high 
levels of poverty and striking income inequalities will continue to 
create a potentially receptive audience for radical populism's message, 
especially in the less developed areas of Latin America.
    Inspired and supported by Venezuela and Cuba, leaders in Bolivia, 
Nicaragua, and--more tentatively--in Ecuador are pursuing agendas that 
undercut checks and balances on presidential power, seek lengthy 
presidential terms, weaken media and civil liberties, and emphasize 
economic nationalism at the expense of market-based approaches. 
Moreover, each of these governments, to varying degrees, has engaged in 
sharply anti-US rhetoric, aligned with Venezuela and Cuba--and 
increasingly Iran--on international issues, and advocated measures that 
directly clash with U.S. initiatives.

                               VENEZUELA

    The referendum on constitutional reform last December was a 
stunning setback for Venezuelan President Chavez and may slow his 
movement toward authoritarian rule and implementation of his vision of 
21st century socialism. However, Chavez will not abandon his goals for 
sweeping change toward socialism in Venezuela but may be compelled to 
spend more time bolstering his domestic support.
    We judge Chavez miscalculated public opposition to such moves as 
seeking indefinite re-election and greater discretionary authority over 
expropriating private property. The proposed constitutional changes 
also generated schisms within the heretofore united pro-Chavez movement 
as Chavista governors and officials came to recognize their loss of 
power under the new system. The outcome of the referendum has given a 
major psychological boost to Chavez's opponents among the middle class, 
the private sector, the Catholic Church, and especially university 
students who have become an increasingly important political force. The 
challenge for the diverse opposition will be to remain united absent a 
coalescing event like the referendum.
    While Chavez's policies are damaging the Venezuelan oil industry 
and its economy, over the next year or so, high oil prices are likely 
to enable Chavez to retain the support of his constituents through 
well-funded social programs; continue co-opting some members of the 
economic elite who are profiting from the consumer-led boom; and stave 
off the eventual consequences of his financial mismanagement. Adverse 
economic trends are increasingly evident, including food shortages, 
rising inflation, and an overvalued currency. Without question, 
policies being pursued by President Chavez have Venezuela on a path to 
ruin its economy.
Continued Regional Activism
    Even with his likely increased attention to domestic affairs, 
Chavez will continue to seek to unite Latin America, under his 
leadership, behind an anti-U.S., radical leftist agenda and to look to 
Cuba as a key ideological ally. Chavez's leadership ambitions are 
likely to encounter growing opposition as time passes, however, because 
he has antagonized several of his regional counterparts and is 
increasingly portrayed by influential media as a divisive figure.
    The sidelining of Fidel Castro in favor of his brother Raul may 
lead to a period of adjustment in Venezuela's relations with Cuba. 
Nevertheless, both governments depend heavily on this special bilateral 
relationship, and we assess they will find ways to smooth over any 
differences that may arise during the ongoing succession period in 
Cuba.
    A high priority for Chavez will be to support the Morales 
government in Bolivia. The inauguration of Nicaragua's Daniel Ortega in 
January 2007 has given Chavez another staunch ally and a location from 
which to expand Venezuela's activities in Central America. We expect 
Chavez to provide generous campaign funding to the Farabundo Marti 
National Liberation Front in El Salvador in its bid to secure the 
presidency in the 2009 election.
Venezuela and Iran
    Chavez and Iran's President Ahmadi-Nejad have established a 
rapport, having visited each other seven times since 2005. Venezuela 
and Iran have made the most progress on the economic and energy fronts, 
negotiating agreements in such areas as agriculture, automobile, and 
tractor manufacture, petrochemicals, and oil exploration in Venezuela's 
Orinoco region. Venezuela and Iran also have discussed cooperation on 
nuclear energy, but we are not aware of any significant developments as 
a result of these discussions.Military cooperation between Tehran and 
Caracas is growing. Nevertheless, the well over $3 billion in arms 
Venezuela has purchased from Russia over the past 2 years far exceeds 
the military sales and maintenance contracts to which Venezuela and 
Iran have agreed. There are growing signs of anxiety among Venezuela's 
neighbors about this military build-up.
Venezuela as Drug Transit Point
    Since 2005 Venezuela has been a major departure point for South 
American--predominantly Colombian--cocaine destined for the U.S. 
market, and its importance as a transshipment center continues to grow. 
Chavez's lack of counterdrug cooperation undermines efforts by other 
countries, particularly Colombia, by giving traffickers access to 
alternative routes and transit points. Chavez is likely to remain 
unengaged on the counternarcotics front unless the drug trade is 
perceived to damage his international image or threaten his political 
longevity.

                                  CUBA

    Raul Castro, whose brother Fidel recently announced he will not 
``run'' again for President, has served as Cuba's Provisional President 
for over 18 months; but Raul Castro's political skills will be further 
tested over the next year as he deals with heightened public 
expectations for economic improvement in food availability, housing, 
transportation, salaries, and meaningful employment. His actions to 
date indicate that he is looking for ways to bring about economic 
changes through a modest, though not a sweeping transformation of 
Cuba's Communist economic model. Raul Castro has publicly called for 
contact with the United States on Havana's terms aimed ultimately at 
bringing about an end to the U.S. embargo.
    We judge Raul's most likely approach will be cautious, incremental 
steps to make the agricultural sector more productive, to allow some 
private sector expansion through the creation of more small-scale 
enterprises, and to attract new foreign investment. If Raul moves 
forward, he probably will take pains to ensure elite consensus. Senior 
Cuban officials have made clear that there are no plans to permit 
competitive elections or otherwise alter the Communist Party's monopoly 
of power. Indeed, the determination of the Cuban leadership to ignore 
outside pressure to carry out significant economic and political reform 
continues to be reinforced by the more than $1 billion net annual 
subsidy that Venezuela provides to sustain Cuba.
    Policy missteps or the mishandling of a crisis by the leadership 
could lead to political instability in Cuba, raising the risk of mass 
migration. We assess the political situation is likely to remain stable 
at least in the initial months following Fidel Castro's death and do 
not expect to see overt signs of major cleavage in the ruling elite 
because many of the top party and aimed forces leaders were hand-picked 
by Raul Castro. Moreover, senior party and government officials 
probably would not want to jeopardize their futures by forcefully 
challenging regime decisions. Pro-democracy dissidents continue to be 
harassed and to risk lengthy prison sentences for minor public 
criticism of the regime.

                                COLOMBIA

    Under President Uribe, Colombia--the United States's taunchest ally 
in the region--has continued to make major progress in strengthening 
democracy by improving security while energetically implementing a 
comprehensive counternarcotics strategy.
    Colombia's better-trained security forces and improving 
counterinsurgency capabilities have significantly weakened the 
Revolutionary Armed Forces of Colombia (FARC), confining the group's 
operations largely to ambushes and harassment attacks. This is a major 
difference from the late 1990s when the FARC regularly assaulted rural 
police garrisons and even battalion-sized Army units. Bogota now holds 
the strategic advantage because of the military's sustained combat 
operations in the FARC's rural heartland and the permanent stationing 
of security forces in regions previously dominated by the insurgents. 
Key successes last year included the killing of two prominent FARC 
Front commanders and the continuing high number of FARC deserters.
    FARC leaders increasingly rely on political tactics to try to 
distract or restrain the government. The group's recent release of two 
Colombian hostages was a bid by the FARC to gain international 
recognition and pressure the government into offering it a 
demilitarized zone. The FARC has since announced it may release three 
more. The Uribe government continues to work with the United States to 
secure the freedom of three U.S. hostages, who have been held captive 
for nearly 5 years. The FARC currently holds about 750 hostages.
    The second major prong of Uribe's security strategy--demobilizing 
and reintegrating paramilitaries into civilian society--also has 
yielded important benefits. Government successes against all the 
illegal armed groups have caused murder and kidnapping rates to drop 
significantly, and the improved security environment has helped fuel an 
economic boom. Stepped-up efforts to prosecute human rights violators, 
including in the security services, have contributed to a gradually 
improving human rights picture. Bogota is taking steps to follow 
through with proposals to strengthen the judiciary and prosecute the 
murders of union members and human rights workers.
    Bogota's counterdrug program continues to show impressive results, 
particularly in interdiction, arrests of major drug traffickers, and 
extradition. The police and military seized 65 metric tons of cocaine 
and cocaine base in 2006; it also destroyed 200 cocaine labs. The 
government has approved more than 550 extraditions to the United States 
since 2002, including more than 100 cases in 2007. Colombian 
authorities captured kingpin Diego Montoya in September, the country's 
most important drug trafficker on the FBI's Top Ten list. Although 
aggressive U.S.-supported aerial eradication has diminished coca 
cultivation in some areas, coca farmers have adapted by moving beyond 
the reach of the spray program or taking actions to save or replace 
sprayed fields. In response, the Uribe administration is combining 
spray efforts with increased emphasis on manual eradication.

                                 MEXICO

    The overall picture in Mexico is positive. President Felipe 
Calderon's strong start in his first year in office featured an 
aggressive counter narcotics offensive, forging a working relationship 
with elements of the opposition, securing a limited revamping of the 
government pension system, and pushing through Congress a high-priority 
fiscal reform package. The public has supported most of Calderon's 
policies, and sustaining this momentum will be an important task as the 
midterm election season approaches in 2009.
    Illegal migration, drug smuggling and associated violence, and 
human trafficking continue to threaten to Mexico's internal security 
and the security of the U.S. southern border. Calderon's aggressive 
offensive against drug-trafficker-inspired violence has led him to 
deploy 20,000 to 30,000 Federal police and soldiers to 10 Mexican 
states. A mid-year truce between major Mexican drug cartels aimed at 
diminishing inter-cartel violence appeared to reduce drug-related 
murders in certain areas last summer; but drug violence remains high 
and indeed, criminal violence has increased in frequency, brutality, 
and geographic scope. The government also faces a rejuvenated threat 
from a small group of domestic insurgents: bombings of Mexican oil and 
natural gas pipelines marked a return to violence by the radical 
leftist Popular Revolutionary Army (EPR). In response, Calderon has 
stepped up security of oil and gas pipelines.
    To deter criminal activity, Calderon has deployed military troops 
to bolster security in states plagued with drug violence and extradited 
high-level traffickers to the United States. He is seeking to reform 
Mexico's police and judicial system, and has subjected top Federal 
police commanders to drug tests, polygraphs, and a review of personal 
assets. While making progress, sustained success will require long-term 
commitment.

                                 AFRICA

    Persistent insecurity in Nigeria's oil producing region, the Niger 
Delta, poses a direct threat to U.S. strategic interests in sub-Saharan 
Africa. Ongoing instability and conflict in other parts of Africa pose 
less direct though still significant threats to U.S. interests because 
of their high humanitarian and peacekeeping costs, drag on democratic 
and economic development, and potential to get worse.

                  THREATS TO U.S. INTERESTS IN NIGERIA

    President Yar'Adua has pledged to resolve the crisis in the Niger 
Delta but faces many obstacles created by decades of neglect, endemic 
corruption, mismanagement, environmental degradation, and deep public 
mistrust of government. The armed elements behind the violence, 
sabotage, kidnappings, and oil theft appear to be splintered into 
numerous groups with different agendas that are mostly criminal in 
focus. Government officials, politicians, and military personnel have a 
history of colluding with these groups. Nigeria's corruption-prone 
military has reined in some gang violence under the new administration 
but lacks the capacity and resources to police sprawling infrastructure 
in its swampy terrain. The military could provoke even more unrest if 
it went on the offensive against the armed groups.
    Nigeria's overall political stability remains fragile even though 
tensions surrounding elections in 2007 have diminished.
    The crisis in Sudan's Darfur region shows few signs of resolution, 
even if the planned U.N. peacekeeping force of 26,000 is fully 
deployed. The rebels are fractured; some of them are prolonging the 
conflict for material gain and others regard the Darfur Peace Agreement 
as serving Khartoum's interests. Khartoum also has failed to honor 
cease fire agreements. Some 2.2 million Darfurians remain displaced. 
Sudan's North-South peace agreement also is in danger of collapse 
because of mounting southern frustration with the North's failure to 
honor core provisions on power and revenue sharing; military 
redeployments, and border demarcation. The agreement is further 
undermined by allegations of southern corruption, lack of expertise, 
and failure to participate in key implementation bodies.
    Violence in Kenya after a close election marred by irregularities 
represents a major setback in a country that had long been among 
Africa's most prosperous, peaceful and stable countries, and one which 
gradually had progressed from dictatorship to democracy. The situation 
remains in flux, but President Kibaki and opposition leader Raila 
Odinga as yet show few signs of meaningful compromise in negotiations 
brokered by foliner U.N. Secretary General Kofi Annan. The political 
dispute has played itself out in ethnic violence that has so far killed 
about 1,000 and caused over 300,000 people to flee to displaced-persons 
camps and a like number to the homes of friends and family. It has 
damaged, perhaps for the long-term, public trust in political 
institutions and the democratization process. Kibaki probably will do 
everything he can to hold onto power. Even if Annan's talks result in a 
negotiated settlement between the Odinga and Kibaki factions, Kenya has 
already entered a period of increased social tension and instability 
that will affect its willingness and ability to cooperate with the U.S. 
on regional diplomatic and counter terrorist matters.
    Ethiopia's intervention in Somalia in December 2006 quickly toppled 
the Council of Islamic Courts, a coalition of business, clan and 
religious interests increasingly under the influence of extremists with 
close ties to the al Qaeda East Africa terrorist network. Ethiopia's 
intervention provoked an insurgency and sharpened divisions among 
Somalis, making governance close to impossible. The Ethiopian-backed 
transitional Federal Government is incapable of administering Somalia 
and probably would flee Mogadishu or collapse if the Ethiopians 
withdrew. Ethiopia's counterinsurgency operations in its own ethnic 
Somali region, the Ogaden, are blocking access for relief workers and 
creating a humanitarian crisis that risks hundreds of thousands.
    Though the situation in the Democratic Republic of Congo has vastly 
improved since the early 2000s, fighting in the east in 2007 displaced 
more than 400,000 civilians and could draw in neighboring countries if 
it resumes. A peace agreement in January 2008 helped defuse a showdown, 
but warlords continue to operate autonomously, underscoring the 
fragility of Congo's post-war transition and the difficulty president 
Kabila will continue to have in consolidating control over the country.
    Fledgling insurgencies among nomads in Mali and Niger are likely to 
remain confined to the remote and sparsely populated Sahara desert but 
nonetheless are a strain on the security forces of these two 
impoverished democracies. The insurgency in Niger also threatens 
uranium mining, which is controlled by a French company.
    Tensions between longtime enemies Ethiopia and Eritrea have 
increased over the past year, with both sides seemingly preparing for a 
new war. The last war killed about 80,000 soldiers on both sides. If 
conflict reignites, Ethiopian President Meles's own hold on power could 
be put in jeopardy if the war went badly for him.
    Serious threats to Zimbabwean President Mugabe have yet to 
materialize despite hyper inflation, economic decline, and political 
uncertainty. Ruling party insiders are divided and appear unlikely to 
mount a credible challenge to Mugabe in the near-term. Opposition party 
leaders, who have been deeply divided in the past, announced in late 
January that they would unify behind a single candidate, but the 
opposition still appears unlikely to mount a serious challenge to 
Mugabe's authority. Zimbabwe is likely to face a political standoff if 
Mugabe suddenly departs the scene without ruling party consensus on his 
successor.

                         GLOBAL ENERGY SECURITY

    Access to stable and affordably priced energy supplies has long 
been a critical element of national security. Sustained increases in 
global demand and the interactive effects of energy with other issues 
have both magnified and broadened the significance of developments in 
the global energy system. Oil prices in late 2007 were near record 
levels and global spare production capacity is below the market's 
preferred cushion of 3 to 4 million barrels per day (b/d).

                      FACTORS FUELING HIGH PRICES

    Geopolitical uncertainties and tensions heighten the risk of a 
major oil supply disruption and the attendant negative repercussions 
for the global economy. Threats to Iraqi and Nigerian oil output remain 
a concern despite some positive developments last year. Terrorist 
attacks against Persian Gulf oil facilities and the potential fallout 
from mounting tension with Iran over its nuclear program are 
significant additional risks.
    In Iraq, completion of a new pipeline and security improvements 
have helped Baghdad boost production and exports in recent months by 
several hundred thousand barrels per day, but output remains vulnerable 
to episodic violence.
    Ethnic and political violence and criminal activity threaten a 
large portion of Nigeria's 2.2 million b/d of oil output. Approximately 
550,000 barrels per day (b/d) in potential oil production, about a 
fifth of Nigeria's production capacity, have been off line since 
February 2006 because of militant attacks, and probably another 100,000 
b/d are stolen. Over the past 2 years, the amount shut in has been as 
much as 900,000 b/d. Even greater and more prolonged disruptions could 
occur again with no advance warning, and this fear is contributing to 
upward pressure on oil prices in international markets. U.S. companies 
have billions of dollars in investments in Nigeria. Abuja has begun to 
take these problems more seriously and directed national security 
assets to the area. However, local militias, who target oil facilities 
and kidnap foreign oil company personnel, will remain a persistent 
threat until political and other grievances are addressed.
    Public statements by al Qaeda leaders indicate that terrorists are 
interested in striking Persian Gulf oil facilities.
    Iran could withhold some or all of its 2.4-million barrels per day 
oil exports or even try to impede the flow of 18 million barrels per 
day of oil through the Strait of Hormuz if its pursuit of the nuclear 
fuel cycle sparks a major crisis; however, we assess Tehran is likely 
to take these provocative steps only if it perceived it had little to 
lose. Venezuela's President Chavez has pledged solidarity with Iran and 
might also curtail some or all of his country's exports of about 2 
million b/d in such a scenario.

                         WINDFALL FOR PRODUCERS

    High energy prices and escalating demand for oil and natural gas, 
also has resulted in windfall profits for producers. OPEC countries 
earned an estimated $690 billion from oil exports last year, nearly 
three times the revenues earned in 2003. The increased revenues also 
have enabled producers like Iran, Venezuela, Sudan, and Russia to 
garner enhanced political, economic and even military advantages and 
complicated multilateral efforts to address problems such as the 
tragedy in Darfur and Iran's nuclear program.
    With about 70 percent of global oil reserves inaccessible or of 
limited accessibility to outside oil companies, competition between 
international oil companies to secure stakes in the few countries open 
to foreign investment is likely to intensify. Determined to secure the 
energy inputs necessary to fuel continued robust economic growth, 
Chinese and Indian state-owned and private energy companies are 
pursuing strategic investments in energy assets worldwide. We also see 
a sharp rise in Russia's investment abroad, much of it driven by 
Russian energy companies. Moscow is using the power of its energy 
monopoly to ensure that east-west energy corridors remain subject to 
Russian influence.

                       RISING GLOBAL FOOD PRICES

    Global food prices also have been rising steadily over the past 2 
years driven by higher energy prices which push up input costs weak 
harvests, historically low stocks, and robust demand. Wheat prices were 
up over 60 percent in 2007, and are at a 20-year high. Other foodstuffs 
such as vegetable oils also are near records. There is little near term 
relief in sight because production increases in several countries, 
including Australia, are hampered by water shortages and land 
constraints. High food prices in several countries, including Russia, 
China, India, and Vietnam, are forcing governments to engage in market 
distorting practices such as banning food exports, increasing 
subsidies, or fixing prices. Food prices are likely to be an issue in 
several upcoming elections, and probably were important in the February 
elections in Pakistan.
    The double impact of high energy and food prices is increasing the 
risk of social and political instability in vulnerable countries. Corn 
protests in Mexico, bread riots in Morocco, and recent unrest in Burma 
are directly linked to higher food and energy prices. Higher food 
prices, as well as rising transportation and logistical costs, also 
have outstripped global aid budgets and adversely impacted the ability 
of donor countries and organizations to provide food aid. For example, 
the World Food Program's food costs have increased by more than 50 
percent over the past 5 years and are projected to grow another 35 
percent by the end of the decade.

                  INFECTIOUS DISEASE AND U.S. SECURITY

    The international spread of infectious diseases and the increasing 
emergence of new ones remain challenges to U.S. security. Even with the 
U.N.'s recent downgrading of the size of the HIV/AIDS epidemic, that 
disease, malaria, and tuberculosis together kill 6 million persons 
annually. The spread of infectious disease is exacerbated by poverty, 
an insufficient global health infrastructure, increasing globalization, 
urbanization (especially in the developing world), migration, complex 
humanitarian emergencies with resultant refugee flows, and 
environmental degradation. Additionally, misuse of antibiotics has led 
to an increase in resistant bacteria strains.
    The most direct threat to the U.S. is the spread of infectious 
pathogens to our shores, or within areas where U.S. personnel are 
deployed. Disease also indirectly threatens us with its potential 
impacts upon the international economy, civil society and critical 
infrastructures. Even a relatively limited outbreak, as happened with 
SARS in 2003, can have widespread ripple effects. Even if an outbreak 
does not threaten the U.S. directly, the resulting instability or 
humanitarian emergency can place additional demands on U.S. military 
and financial resources.
    The most pressing infectious disease challenge for the United 
States is still the potential emergence of a severe influenza pandemic. 
Although the avian H5N1 virus has remained primarily a threat to 
poultry, it continues to expand its geographic coverage, and to 
evolve--indeed it retains the potential to evolve into a human pandemic 
strain.
    A virulent virus from such an emerging pandemic also has the 
potential to be used as a weapon by a terrorist group or a technically 
experienced lone actor; such an attack would likely be devastating, 
both economically and socially. While we do not currently see this 
level of technical sophistication in terrorist groups--isolating a 
virulent strain is difficult the possibility cannot be ruled out; 
therefore, we will continue to use our intelligence resources to try to 
help detect any such preparations to use a virus as a terrorist weapon.

                               CONCLUSION

    The issues that we consider here today confront responsible 
citizens and their governments everywhere. I, my colleagues, and the IC 
we represent are fully committed to arming our policymakers, 
warfighters, and law enforcement officers with the best intelligence 
and analytic insight we can. This is necessary to enable them to take 
the actions and make the decisions that will protect American lives and 
American interests, here and around the world.

    Chairman Levin. Thank you, Director.
    General Maples?

   STATEMENT OF LTG MICHAEL D. MAPLES, U.S. ARMY, DIRECTOR, 
                  DEFENSE INTELLIGENCE AGENCY

    General Maples. Thank you, Mr. Chairman, Senator Inhofe, 
members of the committee. I too appreciate the opportunity to 
be here today and to present the information that has been 
developed by our defense intelligence professionals. I too have 
submitted an unclassified statement for the record, as 
requested by the committee, and I will focus my oral remarks on 
key military operations and capabilities, beginning with global 
military trends.
    Among them: the availability of the knowledge and 
technology needed to produce and employ WMD. Longer range 
ballistic missiles that are growing more mobile, accurate, and 
harder to find. Ballistic missiles are increasingly being 
designed or employed to penetrate advanced air defense systems. 
Improvised devices and suicide weapons as weapons of choice. 
The growing ability to target and attack space-based 
communications, intelligence, surveillance, and reconnaissance 
assets. The proliferation of precision conventional anti-tank, 
anti-ship, and anti-aircraft missiles, including to non-state 
criminal or terrorist networks. The sophisticated ability of 
select nations and non-state groups to exploit and perhaps 
target for attack our computer networks. Lastly, efforts by 
potential adversaries to conceal and protect their military 
leadership and special weapons programs deep underground, which 
makes them increasingly difficult to locate and, if directed, 
to attack.
    Turning now to ongoing operations in countries and regions 
of special interest. In Iraq, an improved security situation 
has resulted from coalition and Iraqi operations, tribal 
security initiatives, Concerned Local Citizen (CLC) groups, and 
the Jaish al-Mahdi freeze order. The trends are encouraging, 
but they are not yet irreversible.
    Al Qaeda in Iraq has been damaged, but is still attempting 
to reignite sectarian violence and remains able to conduct high 
profile attacks. It has moved into the north, into what it 
hopes to be more permissive areas. It also remains committed to 
planning and supporting attacks against the West beyond Iraq's 
borders.
    We have seen a decline of the movement of foreign 
terrorists into Iraq. The Islamic Revolutionary Guards Corps 
Quds Force continues to provide training, weapons, and support 
to groups that attack Iraqi security forces and coalition 
forces in Iraq. DIA has not yet seen evidence that Iran has 
ended this assistance.
    Iraqi security forces, while reliant on coalition combat 
service support, have improved their overall capabilities and 
are increasingly leading counterinsurgency operations.
    Turkey has launched a limited ground incursion with 
supporting artillery and air strikes against the Kurdish 
People's Congress (KGK) in northern Iraq. Sustained operations 
could jeopardize stability in northern Iraq.
    In Afghanistan, the United States and International 
Security Assistance Forces successes have inflicted losses on 
Taliban leadership and prevented the Taliban from conducting 
sustained conventional operations. Despite their losses, the 
Taliban maintain access to local Pashtun and some foreign 
fighters and is employing suicide bombings, improvised 
explosive devices, and small arms to increase attack levels. 
While the insurgency remains concentrated in the Pashtun-
dominated south and east, it has expanded to some western 
areas.
    The Afghan army has fielded 11 of 14 infantry brigades. 
More than one-third of Afghanistan's combat arms battalions are 
assessed as capable of leading operations with coalition 
support.
    In addition to the Taliban, the central government is 
challenged by corruption and strong narcotics trade. NATO 
member nations continue to debate how best to achieve 
counterinsurgency goals in Afghanistan. There are differences 
on many levels on approaches to reconciliation, reconstruction, 
and the use of direct combat power.
    Iran continues efforts to strengthen its influence in 
Afghanistan using humanitarian aid, commercial trade, and some 
arms shipments. We believe that al Qaeda has expanded its 
support to the Afghan insurgency. At the same time, al Qaeda 
presents an increased threat to Pakistan while it continues to 
plan, support, and direct transnational attacks from its de 
facto safe haven in Pakistan's largely ungoverned Frontier 
Provinces. Al Qaeda has extended its operational reach through 
partnerships and mergers with compatible regional terrorist 
groups, including a continued effort to expand into Africa. Al 
Qaeda maintains its desire to possess WMD and, despite the 
death or capture of senior operatives, al Qaeda remains a 
threat to the domestic United States and our allies and 
interests overseas.
    We know that al Qaeda is interested in recruiting 
operatives who can travel easily and without drawing scrutiny 
from security services. As such, Europe could be used as a 
platform from which to launch attacks against the United 
States.
    Pakistani military operations in the FATA have had limited 
effect on al Qaeda. Pakistan recognizes the threat and realizes 
the need to develop more effective counterinsurgency and 
counterterrorism capabilities to complement their conventional 
forces. Pakistan has adopted a military, political, 
administrative, and economic strategy focused on the FATA. At 
present we have confidence in Pakistan's ability to safeguard 
its nuclear weapons.
    Iran's military is designed principally to defend against 
external threats and threats posed by internal opponents. 
However, Iran could conduct limited offensive operations with 
its ballistic missiles and naval forces. Iran is investing 
heavily in asymmetric naval capabilities, modern air defense 
missile systems, and ballistic missiles. New capabilities 
include missile patrol boats, anti-ship cruise missiles, 
surface-to-air missile systems, and an extended range variant 
of the Shahab-3 ballistic missile. Iran is close to acquiring 
long-range SA-20 SAMs and is developing a new Ashur medium-
range ballistic missile. Tehran still supports terrorist 
proxies, including Lebanese Hezbollah, with weapons, training, 
and money.
    North Korea maintains large forward-positioned land forces 
that are, however, lacking in training and equipment. Robust 
artillery and mobile ballistic missiles are being sustained. 
The development of the Taepo Dong-2 continues, as does work on 
an intermediate range ballistic missile, a variant of which has 
reportedly been sold to Iran.
    North Korea may have several nuclear weapons stockpiled 
from plutonium produced at Yongbyon. We do not know the 
conditions under which North Korea would fully relinquish its 
nuclear weapons program.
    China is fielding sophisticated foreign-built and 
indigenously produced weapons systems and is testing new 
doctrines that it believes will strengthen its ability to 
prevail in regional conflicts and counter traditional U.S. 
military advantages. Military modernization includes anti-ship, 
cruise and ballistic missiles, submarines, a cruise missile-
capable bomber, and modern surface-to-air missile systems. 
China's missile development includes the road-mobile DF-31 
Alpha intercontinental ballistic missiles (ICBM). Future ICBMs 
could include the JL-2 submarine-launched ballistic missile and 
some ICBMs with multiple independently-targeted reentry 
vehicles.
    China successfully tested an anti-satellite missile in 
January 2007 and is developing counter-space jammers and 
directed energy weapons. China seeks to replace its historical 
reliance on mass conscription in favor of a more professional 
force, one capable of successfully engaging in modern warfare.
    Russia is trying to reestablish a degree of military power 
that it believes is commensurate with its renewed economic 
strength and political confidence. Russia's widely publicized 
strategic missile launches, long-range aviation flights, and 
carrier strike group deployment are designed to demonstrate its 
global reach and relevance. Development, production, and 
deployment of advanced strategic weapons continue, including 
the road-mobile SS-27 ICBM and the Bulova-30 submarine-launched 
ballistic missile.
    While Russia is making some improvements in its high 
readiness permanently ready conventional forces, elsewhere it 
is finding it difficult to improve the quality of conventional 
training, modernize its equipment, and recruit and retain high 
quality volunteers and noncommissioned officers (NCOs).
    In 2007 Russia signed more than $10 billion in arms sales, 
the second consecutive year of such high sales activities. 
Moscow is selling advanced fighters, surface-to-air missiles, 
submarines, frigates, main battle tanks, and armored personnel 
carriers.
    The Levant remains tense with the potential for renewed 
conflict. Syria is investing heavily in advanced Russian anti-
tank guided missiles, based in large part on Hezbollah's 
success with this weapon in the summer 2006. Continued attacks 
on Israel from Gaza increase the chances of Israeli military 
action there.
    To our south, Colombia's counterinsurgency operations are 
achieving success against the Revolutionary Armed Forces of 
Colombia (FARC). Venezuela's neighbors express concern about 
its desire to buy submarines, transport aircraft, and an air 
defense system, in addition to the advanced fighters, attack 
helicopters, and assault rifles it has already purchased.
    In summary, the United States is operating within an 
unusually complex environment, marked by an accelerating 
operational pace and a broad spectrum of potential threats. 
That threat spectrum is bounded on the one side by traditional 
nation-states with significant military inventories and on the 
other by non-state terrorist or criminal networks that exploit 
the gaps and seams between nations, cultures, laws, and belief 
systems.
    With the support of Congress, we continue to strengthen our 
ability to collect and analyze the military intelligence that 
policymakers and our commanders need in order to be successful.
    In conclusion, thank you for this opportunity to share with 
you the collective work of our defense intelligence 
professionals, who work shoulder to shoulder with our national 
intelligence, homeland security, and law enforcement 
counterparts. They are honored to serve our Nation. On their 
behalf, thank you for this committee's support and your 
continued confidence.
    [The prepared statement of General Maples follows:]

            Prepared Statement by LTG Michael D. Maples, USA

    Good afternoon Mr. Chairman, Ranking Member McCain, and 
distinguished members of this committee. Thank you for this opportunity 
to testify on current and projected threats to the United States.
    My testimony today reflects the work of thousands of collectors, 
analysts and support personnel, many of whom are deployed worldwide and 
often to dangerous and remote locations. They take great pride in 
providing the very best military intelligence to a broad range of 
customers, including the President of the United States, Congress, the 
Secretary of Defense, Chairman of the Joint Chiefs of Staff, the U.S. 
Combatant Commands, allies and our service men and women in combat.
    Whether defense intelligence is informing national policy or 
enabling command decisions, we remain acutely aware at all times that 
lives depend upon on the accuracy, speed and thoroughness of our work. 
On behalf of the civilian and military men and women of the Defense 
Intelligence Agency (DIA) and across the defense intelligence 
enterprise, thank you for your support.
    My testimony begins with an assessment of today's global strategic 
environment, followed by trends and developments in Iraq and 
Afghanistan. I will also discuss today's global terrorist threat before 
addressing countries, regions and transnational issues of special 
interest.

                      GLOBAL STRATEGIC ENVIRONMENT

    The United States is presently operating within an unusually 
complex environment marked by an accelerating operational pace and a 
broad spectrum of potential threats. That spectrum is bounded on one 
side by traditional nation-state regional powers within recognized 
borders and armed with large military inventories and on the other by 
non-state terrorist or criminal networks operating in the gaps and 
seams between nations, cultures, laws, and belief systems.
    The environment includes ongoing combat operations, ascending and 
aspiring regional powers, the proliferation of weapons of mass 
destruction (WMD), evolving alliances, competition for resources and 
ideological conflicts that are fueling novel challenges to the 
established order in regions of vital interest to the United States.
    While the United States still projects a dominant influence across 
the world's military and security landscape, other nation-states and 
non-state actors are aggressively seeking advantage. Today's 
unprecedented access to information gives individuals and events the 
potential for a real-time, unfiltered worldwide audience which can 
influence global leadership and popular perceptions. This can compress 
time available for decisionmaking and the considerations that 
historically have been addressed separately at the tactical, 
operational and strategic levels of conflict.
    This uncertain and dynamic environment also fosters the conditions 
that can simultaneously enable and mask strategic surprise, whether 
initiated by design or miscalculation.
    In this setting, DIA collects and analyzes intelligence against a 
broad range of highly dissimilar potential threats and adversaries. 
While our priority today is to provide the best intelligence in support 
of current military operations, we continue to meet our additional, 
broader responsibilities.

                           CURRENT OPERATIONS

Iraq
    A number of trends across Iraq turned more positive for the 
coalition and Iraqi Government in 2007, though none are yet 
irreversible.
    Overall violence across the country has declined to the lowest 
level since April 2005 and violence against coalition forces is at the 
lowest level since March 2004. This is largely the combined result of 
coalition and Iraqi operations, tribal security initiatives, concerned 
local citizen groups and accommodations with former insurgents.
    Muqtada Al-Sadr's ``freeze'' order helped lower violence levels in 
Baghdad and southern Iraq, although some Iranian-supported Jaysh al-
Mahdi elements still target coalition and Iraqi forces, Sunni civilians 
and competing Shiite groups.
    Al Qaeda-in-Iraq (AQI) and other active Sunni Arab insurgents moved 
most of their operations to more permissive northern provinces where 
they are trying to exploit Arab fears of Kurdish expansionism and 
related territorial disputes.
    AQI remains the most active terrorist group in Iraq. It continues 
to target the Iraqi Government and coalition forces while also trying 
to reignite sectarian violence. Successful coalition and Iraqi security 
forces (ISF) targeting of AQI leaders, the widespread emergence of 
local security groups through the Sahawa or Awakening movement, 
coalition support for local security initiatives and accommodation with 
former insurgents have significantly reduced the ability of AQI and 
other irreconcilable insurgent groups to operate in central and western 
Iraq. In response, AQI is targeting anti-AQI Concerned Local Citizen 
(CLC), or ``Sons of Iraq'' local security groups in Anbar, Diyala, and 
other provinces. AQI remains able to launch high-profile attacks. With 
its continued commitment to external attack planning, AQI also remains 
a threat beyond Iraq.
    Sunni insurgent groups remain active at lower levels throughout 
central and northern Iraq. Some align with larger groups such as the 
1920 Revolution Brigades, but most operate at a more local level.
    Tribal opposition grew out of frustration with AQI's terrorist 
tactics against Sunni civilians and AQI encroachment upon traditional 
tribal authorities and economic activities. In response, some former 
insurgents joined the ranks of the tribal ``awakening'' movements in 
many areas. This cooperation is generally localized and rooted in the 
many intertwining family, tribal, and neighborhood ties between 
insurgents and tribes. Once they feel the threat from AQI has ended, 
the tribes and other reconciled Sunni groups may reconsider these 
alliances of convenience if they continue to feel politically 
disenfranchised and do not receive the economic, infrastructure and 
other benefits from cooperation with the coalition and the Government 
of Iraq (GOI) and/or believe their security is threatened. Recent 
passage of the Provincial Powers law, which requires provincial 
elections to be held by October 2008, is likely to help defuse growing 
inter-tribal disputes in western Iraq.
    Sunni Arab relations with coalition forces have greatly improved, 
as have those between local Sunni security groups and the GOI despite 
lingering mutual mistrust. Greater stability has enabled reconstruction 
and the central government has recently shown more willingness to fund 
projects in Sunni-majority areas. Tribal awakening movements and other 
CLC local security groups want many of their members to be accepted 
into the formal ISF or receive other government and civilian jobs. In 
the near term, Sunni Arabs are likely to continue cooperating with 
coalition forces, at least partly to pressure Iraq's government to 
increase Sunni representation across the government and security forces 
and gain a greater share of resources. Some Sunni Arab groups now favor 
a continued U.S. troop presence primarily as a way to counter Iranian 
influence, although others remain opposed to a continued coalition 
presence.
    During 2007, Shiite parties and militants increasingly fought at 
the local and national levels for political and security dominance, 
particularly over southern Iraq's religious and economic spoils. 
Despite the Sadrist freeze, the intra-Shiite conflict will likely 
continue and could intensify in the run-up to provincial elections, the 
coalition drawdown, the transfer of additional provinces to Iraqi 
control and the federalism debate.
    Shiite parties in the government generally support the coalition, 
but want more autonomy and a bilateral security agreement with the 
United States. The Sadrists still strongly oppose the coalition's 
presence. The Iraqi Shiite religious authority (Marja'iyah) supports 
Sunni-Shiite reconciliation and the Iraqi Government.
    Expanding Kurdish influence across northern Iraq's disputed 
territories is fueling ethnic tensions and violence between Kurds and 
Arabs. The Kurds will leverage their political and military strength to 
ensure that disputed areas come under Kurdish control. They seek to 
accomplish this through the Article 140 referendum process and by 
placing Kurdish forces in key locations. Increased Kurdish economic 
development, resulting from regional laws passed without Baghdad's 
approval or blessing may exacerbate the ethnic divide.
    Turkey has attempted to disrupt and degrade cross-border Kurdish 
terrorist activity with some limited artillery, air-strikes, and ground 
operations into northern Iraq. Ankara has indicated an intent to 
conduct additional operations against the Kurdish People's Congress, or 
KGK (previously called the PKK) in response to the perceived threat. A 
sustained, large-scale Turkish operation could jeopardize stability in 
northern Iraq.
    Iran continues to provide money, weapons, and training, often 
through the Iranian Revolutionary Guards Corps-Qods Force (IRGC-QF), to 
some Iraqi Shiite militants despite pledges by senior Iranian officials 
to stop such support. The weapons include very deadly Explosively 
Formed Penetrators (EFPs) with radio-controlled, remote arming, and 
sophisticated passive infrared detonators, mortars, rockets, rocket-
propelled grenades and launchers, small arms ammunition and explosives.
    The IRGC-QF is part of the Iranian government. It covertly trains, 
funds and arms Iraqi insurgents and militias. It also offers strategic 
and operational guidance aimed at undermining Iraqi stability. 
Approximately 12,000 Iraqi Shiite operatives that had been exiled to 
Iran entered Iraq at the start of the war in 2003. The IRGC-QF's 
partner, Lebanese Hizballah, has trained Iraqi insurgents in Iraq, Iran 
and Lebanon. Lebanese Hizballah provides insurgents with the tactics 
and technology to conduct kidnappings, small unit tactical operations 
and employ sophisticated improvised explosive devices (IEDs), among the 
lessons learned from that group's operations in southern Lebanon.
    One of the signature weapons of this war is the IED, which can be 
employed in a variety of ways. Efforts to defeat these weapons and the 
networks that design, build, emplace and fund them draw persistent 
counter-responses. The steady flow of new IED technologies and highly-
creative emplacement and employment methods underscore the enemy's 
ability to adapt and react quickly and efficiently.
    The ISF improved their overall capabilities in 2007. While the ISF 
is increasingly leading counterinsurgency operations. the force still 
depends upon coalition combat service support. Iraq's army has grown 
substantially with the addition of two more divisions, the decision to 
fill out other divisions and a new policy permitting combat units to 
man 120-percent over authorized levels. ISF numbers have grown partly 
due to more successful recruitment among recently engaged Sunni tribal 
leaders and former regime commissioned and noncommissioned officers. 
This also is increasing Sunni Arab representation in the ISF. Today, 
there are approximately 450,000 trained members of the ISF including 
army, local and national police, border enforcement, and air force, 
navy and special operations forces. The ISF inventory includes more 
than 350 armored personnel carriers, 3,000 cargo trucks, 150 tanks, 25 
helicopters, 15 fixed-wing aircraft, 3 transport aircraft, and 30 
patrol boats.
    However, the ISF still suffers from a lack of trained, qualified, 
and experienced leaders at the tactical level. This fosters a climate 
in which individuals remain vulnerable to improper political and 
criminal influence. Iraq's army is trying to increase the number and 
quality of its leaders. A new military justice system will help enforce 
the rule of law. That will help security forces win popular recognition 
as the legitimate guarantor of Iraq's security.
    The flow of foreign terrorists into Iraq and the number of 
associated suicide attacks have declined. The Saudi grand mufti's 1 
October condemnation of foreign terrorists and Osama bin Laden's 
December 2007 message in which he spoke of mistakes in Iraq could 
weaken AQI's appeal to foreign recruits. At the same time, the nations 
where foreign fighters originate or transit have increased their 
counterterrorism efforts, especially targeting foreign fighter 
transport networks.
Afghanistan
    Although the Taliban cannot conduct sustained conventional 
operations, it has increased attacks every year since 2002. Violence in 
2007 grew by 33 percent over levels in 2006. Statistics also show 21 
percent increases in suicide bombings and the use of IEDs and a 47 
percent increase in small arms attacks. Some of these trends reflect 
the International Security Assistance Force's (ISAF) increased 
engagements in expanded operational areas.
    Through violence and intimidation, the Taliban-led insurgency 
continues to undermine the development of a stable Afghanistan. While 
the insurgency remains concentrated in the Pashtun dominated south and 
east, it expanded in 2007 to some western areas that lack an effective 
security and government presence.
    The Taliban play to an international audience through press 
releases, videos, and the Internet, sometimes with al Qaeda's support. 
The Taliban lost several key commanders in 2007. However, they can 
sustain operations with steady access to local Pashtun and some foreign 
fighters. Al Qaeda's presence in Afghanistan is increasing to levels 
unseen since 2001-2002. Al Qaeda supports the Afghan insurgency with 
personnel, training and resources, particularly in Afghanistan's south 
and east.
    Insurgents in Afghanistan have expanded their use of some tactics 
and techniques that have proven effective in Iraq, such as kidnappings, 
suicide attacks and the occasional use of EFPs, demonstrating the 
adaptive nature of the threat. They also still cross the porous Afghan-
Pakistani border despite pledges by local tribal groups to the 
Pakistani government that they would remove foreign fighters from their 
midst while also preventing insurgent border transits.
    Iran seeks to expand its influence in Afghanistan, mainly along its 
eastern border, while challenging the coalition's presence and 
influence in Afghanistan. Tehran advances its goals through legitimate 
business and humanitarian efforts along with weapon shipments that 
include EFPs, rocket propelled grenades, mortars, rockets, small arms 
ammunition and explosives.
    Afghanistan's army and police forces are growing slowly and 
unevenly both in numbers and effectiveness. The Afghan army has made 
progress by fielding 11 of 14 projected infantry brigades. A third of 
Afghanistan's combat arms battalions can lead combat operations, albeit 
with coalition support. In contrast, Afghan National Police (ANP) 
forces still require considerable training and coalition support to 
fulfill their mission. The Afghan National Army has grown from 31,000 
to approximately 49,000 over the last year. The ANP has grown from 
56,000 to 75,000 over the same period and is expected to grow to 82,000 
by the end of this year. Recent polls show that the Afghan people 
generally view the army as one of the most trusted Afghan institutions. 
However, the Afghan Government continues to struggle against violence, 
corruption, narcotics and foreigners opposed to a unified and strong 
Afghanistan.
    North Atlantic Treaty Organization (NATO) member nations continue 
to negotiate how to achieve counterinsurgency goals in Afghanistan. 
Differences exist over manning levels and the relative utility of hard 
and soft methods, such as use of force, reconstruction and 
reconciliation programs. Budget constraints and competing global 
deployments will limit some allies from contributing more personnel and 
equipment to the ISAF which now includes approximately 42,000 troops 
from all 26 NATO and some non-NATO nations. NATO allies engaged in 
combat operations in Afghanistan have performed well, but low domestic 
support for ISAF among some allied nations will limit their willingness 
to engage in more direct combat due to concerns over potential 
casualties.
    The Afghan Government is likely to progress slowly even with NATO's 
and ISAF's continued help. Afghanistan will remain vulnerable to 
insurgent violence, the narcotics trade, foreign influences and 
disruptive political maneuvering ahead of the 2009 Afghan presidential 
election.
    Afghan popular discontent will endure in areas where corruption 
persists, select Pashtun tribes remain disenfranchised, the promise of 
reconstruction is not kept and in areas with poor security. The Taliban 
insurgency and foreign terrorists will continue to attack the Afghan 
Government's resolve and the international community's commitment to 
build a stable Afghanistan.

                     TRANSNATIONAL TERRORIST THREAT

    Still the most significant terrorist threat to U.S. interests 
worldwide, al Qaeda remains committed to using violence to displace 
western influences across the Islamic world with its own interpretation 
of Islamic rule.
    During 2007, al Qaeda expanded its support to the Afghan 
insurgency, continued to plan, support, and direct transnational 
attacks against the west from its safe-haven inside Pakistan's 
ungoverned regions while also expanding the threat it poses to Pakistan 
itself.
    We know from the past that al Qaeda is interested in recruiting 
operatives who can travel easily and without drawing scrutiny from 
security services. As such, Europe could be used as a platform from 
which to launch attacks against the United States.
    Al Qaeda continues efforts to obtain chemical, biological, 
radiological, and nuclear capabilities. In September 2006, al Qaeda-in-
Iraq leader Abu Ayyub al-Masri publicly called upon scientists to help 
the terrorist group develop such weapons. These efforts will likely 
persist.
    Al Qaeda's threat to Pakistan itself grew in 2007, marked 
explicitly by Osama bin Laden's September appeal that Pakistanis rise 
up against President Musharraf. This is broadly consistent with 
previous assassination attempts against Musharraf and previous calls 
from other senior al Qaeda members such as Ayman al-Zawahiri. Al Qaeda 
may step up attacks across Pakistan to accelerate and exploit internal 
instability with likely targets also including U.S. and western 
interests.
    Osama bin Laden issued six statements between September and 
December 2007, his first public statements since July 2006 and first 
live video since October 2004. The spate of statements by the group's 
leaders, including Ayman al Zawahiri, signals their continued health 
and control over the movement despite their isolation. The messages are 
designed to encourage donors, enlist recruits, maintain control over 
the movement and discourage the west.
    Al Qaeda has consistently recovered from senior leadership losses. 
Despite the deaths and capture of key figures, mid-level operatives 
rise to advance plans and operations. Al-Zawahiri and Abu Yahya al-Libi 
have issued statements throughout the year, but from late April to 
early June, several others issued statements in rapid succession, each 
emphasizing various themes to different audiences. They included al-
Zawahiri, Abu al-Yazid, Adam Gadahn, and Abu Yahya al-Libi. This array 
of speakers is likely meant to signal to internal and external 
audiences that al Qaeda's viability transcends bin Ladin and al-
Zawahiri.
    Al Qaeda pursued partnerships in 2007 with compatible regional 
terrorist groups to extend the organization's financial and operational 
reach while also seeking to portray a sense of momentum under the al 
Qaeda brand. In November 2007, al-Zawahiri announced a merger between 
the Libyan Islamic Fighting Group (LIFG) and al Qaeda, following the 
2006 merger with the Algerian Salafist Group for Preaching and Combat 
(GSPC).
    Al Qaeda selects regional terrorist groups for ``franchises'' based 
upon their religious and ideological beliefs, capabilities and 
adherence to al Qaeda's global agenda. Al Qaeda uses such mergers to 
foster public perceptions of its worldwide influence, pursue its 
transnational agenda and to strike U.S. and western interests in new 
areas.
    Regional groups believe such mergers enhance their status and 
strengthen their ability to recruit and raise funds. However, such 
mergers require most regional groups to subordinate their local agendas 
to al Qaeda's global aspirations, which can spark internal friction. A 
regional group's mistakes can also tarnish the al Qaeda brand, as AQI 
demonstrated in 2006-2007 when it failed to rally the Sunni Arab 
population to its banner and instead sparked violent tribal opposition 
in al-Anbar and beyond.
    As these mergers multiply, the threat to U.S. and western interests 
may increase as new franchises adopt al Qaeda's targeting priorities, 
namely western interests. For example, following its 2006 merger, the 
GSPC--renamed al Qaeda in the Lands of the Islamic Maghreb--increased 
its focus on targeting western interests.
    Al Qaeda's mergers with the GSPC and LIFG demonstrate its effort to 
expand into Africa. Lebanon may be another region ripe for al Qaeda 
expansion.
    East Africa al Qaeda and an increasing number of associated Somali 
extremists operating across the largely lawless territory of Somalia 
continue to pose the greatest threat to U.S. and western interests 
across the region.
    Since Ethiopia's late 2006 intervention in Somalia, anti-government 
militants, remnants of the Council of Islamic Courts and Somali 
extremists associated with the East Africa al Qaeda have regrouped 
mainly in Mogadishu. They conduct assassinations, bombings and suicide 
attacks against the Somali government, Ethiopian troops and the African 
Union Mission in Somalia. While regional counterterrorism operations 
have killed or captured some key operatives, local al Qaeda and their 
associates still operate with relative freedom.
    Following the February 12 killing of Hizballah terrorist leader 
Imad Mughniyah, Hizballah publicly threatened Israel and reprisal 
attacks against Israeli and/or Jewish interests are likely. Hizballah 
has a near global reach and previously has demonstrated a retaliatory 
capability with attacks in Buenos Aires during the 1990s. If Hizballah 
perceives significant U.S. involvement, attacks against U.S. interests 
are also likely.

                    NATIONS AND REGIONS OF INTEREST

Iran
    Iran's military is designed principally to defend against external 
threats from larger, more modem adversaries such as the United States 
and threats posed by internal opponents. However, Iran could conduct 
limited offensive operations with its ballistic missile and naval 
forces.
    Diplomacy, economic leverage, and active sponsorship of terrorist 
and paramilitary groups are the tools Tehran uses to drive its 
aggressive foreign policy. In particular, Tehran uses terrorism to 
pressure or intimidate other countries. More broadly, it serves as a 
strategic deterrent. Tehran assesses that its use of terrorism provides 
benefits with few costs and risks largely because it believes it 
successfully conceals its involvement in such tactics. Iran continues 
to provide lethal aid to Iraqi Shiite militants and Afghan insurgents 
while simultaneously providing weapons, training and money to Lebanese 
Hizballah, its strategic partner.
    In recent years, weapons that are unique to the IRGC-QF and 
Lebanese Hizballah have been used by Iraqi Shiite militants in anti-
coalition attacks, especially EFPs. Coalition forces have also 
recovered Iranian-made munitions, including EFPs, in Afghanistan. 
Within the country's borders, modernization of Iran's conventional 
military inventory has traditionally favored naval and air defense 
forces over ground and air units.
    Ongoing naval modernization is focused on asymmetric equipment such 
as fast missile patrol boats as well as anti-ship cruise missiles and 
naval mines. Iran recently launched an additional mini-sub and started 
an additional product line for the MOWJ corvette. Iranian broadcasts 
claim that Iranian unmanned aerial vehicles have monitored U.S. 
aircraft carrier operations in the Persian Gulf.
    Since early 2007, Iran has begun to invest heavily in advanced air 
defenses, reversing decades of neglect in this arena. Iran began taking 
delivery of the advanced SA-15 tactical surface-to-air missile systems 
and in December 2007 announced it will acquire the strategic, long-
range SA-20. Iran's procurement of modern surface-to-air missiles 
(SAMs) with automated command, control, and communications systems will 
improve its ability to protect senior leadership and key nuclear and 
industrial facilities.
    While not investing in major new ground systems since at least 
early 2005, Iran is building an asymmetric capability to counter more 
advanced, adversary ground forces, including through enhancements to 
its Basij volunteer forces, which would play a large role in an 
asymmetric fight.
    Regular Iranian ballistic missile training continues throughout the 
country. Iran continues to develop and acquire ballistic missiles that 
can hit Israel and central Europe, including Iranian claims of an 
extended-range variant of the Shahab-3 and a new 2,000-km medium range 
ballistic missile (MRBM) called the Ashura. Beyond the steady growth in 
its missile and rocket inventories, Iran has boosted the lethality and 
effectiveness of existing systems with accuracy improvements and new 
sub-munition payloads.
    We judge that Iran halted its nuclear weaponization and covert 
uranium conversion and enrichment-related work in 2003, but we assess 
that Tehran at a minimum is keeping open the option to develop nuclear 
weapons. Iran continues to develop its enrichment program in defiance 
of U.N. Security Council resolutions. Iran is producing uranium 
enrichment feed material at Esfahan, claims to be enriching uranium in 
3,000 centrifuges at Natanz and is working on more advanced 
centrifuges. It also continues to build a heavy water reactor at Arak 
which will be capable of producing plutonium that could be processed 
for use in a weapon.
    Tehran continues to seek dual-use biotechnical materials, 
equipment, and expertise which have legitimate uses, but also could 
enable ongoing biological warfare efforts. We assess that Tehran 
maintains dual-use facilities intended to produce chemical warfare 
agents in times of need and conducts research that may have offensive 
applications.
North Korea
    North Korea's main goals are to preserve its current system of 
government while improving its economic situation, albeit at a pace it 
believes will not threaten internal stability. Pyongyang does not view 
its nuclear weapons, improved relations with the United States and a 
large Active-Duty Force of about 1.2 million as mutually exclusive. 
Rather they are the means Pyongyang uses to realize its goals.
    North Korea's large, forward-positioned, but poorly-equipped and 
poorly-trained military is not well-suited to initiate major military 
operations against the Republic of Korea (ROK). The long-range 
artillery the north has positioned very near the demilitarized zone is 
complimented by a substantial mobile ballistic missile force with an 
array of warhead options to include WMD that can strike U.S. forces and 
our allies in the ROK and Japan. The north relies upon these 
capabilities to ensure its sovereignty and independence.
    Development of the Taepo Dong-2, which has the potential to reach 
the continental United States with a nuclear payload, continues despite 
a failed July 2006 test launch. North Korea also continues work on an 
intermediate range ballistic missile.
    Although North Korea has halted and disabled portions of its 
nuclear program, we do not know the conditions under which Pyongyang 
would entirely abandon its nuclear weapons capability. It could have 
stockpiled several nuclear weapons from plutonium produced at Yongbyon 
and it likely sought a uranium enrichment capability for nuclear 
weapons. It may also have proliferated nuclear weapons-related 
technology abroad. North Korea may be able to successfully mate a 
nuclear warhead to a mobile ballistic missile.
    North Korea has had a longstanding chemical warfare program and we 
believe North Korea's chemical warfare capabilities probably included 
the ability to produce bulk quantities of nerve, blister, choking and 
blood agents. We believe that Pyongyang possesses a sizable stockpile 
of agents. North Korea has yet to accede to the Chemical Weapons 
Convention and is not a member of the Australia Group.
    North Korea possesses a biotechnical infrastructure that could 
support the production of biological warfare agents. North Korea 
continues to research bacterial and viral biological agents that could 
support an offensive biological warfare program. This biological 
infrastructure combined with its weapons industry give North Korea a 
potentially robust biological warfare capability. North Korea is stable 
and leadership succession, should it occur due to Kim's sudden death, 
is more likely to be smooth than not. Should the Six-Party Talks break 
down, the North is likely to respond with resumed production of fissile 
material at Yongbyon while also increasing rhetoric intended to 
encourage a return to dialogue on the North's terms. In such a 
scenario, additional missile or nuclear tests could occur.
China
    China is strengthening its ability to conduct military operations 
along its periphery on its own terms. It is building and fielding 
sophisticated weapon systems and testing new doctrines that it believes 
will allow it to prevail in regional conflicts and also counter 
traditional U.S. military advantages.
    The People's Liberation Army (PLA) is building its own 
sophisticated aircraft, surface combatants, submarines and weapon 
systems while still buying others overseas. For example, China is 
integrating Russian-produced Kilo-class submarines and Sovremenny-class 
destroyers into the Navy as well as 5-300 PMU2 surface-to-air missiles 
and Su-27 aircraft into the Air Force. China has developed and begun to 
deploy indigenous SAM systems which, together with SAMs imported from 
Russia, provide Beijing with a modem, layered, groundbased air defense 
capability to defend important assets. China bought four S-300 PMU-2 
(SA-20) air defense battalions and intends to buy four more. This 
increases its engagement range out to 200 km. China is developing a 
layered maritime capability with medium-range anti-ship ballistic 
missiles, submarines, maritime strike aircraft and surface combatants 
armed with increasingly sophisticated anti-ship cruise missiles.
    The PLA has achieved moderate success in introducing these new 
weapons. Additional integration probably will accelerate as the PLA 
explores the full potential of new weapons.
    China is looking beyond a potential Taiwan contingency and is 
pursuing capabilities needed to become a major regional power. The navy 
already operates a large surface and an increasingly modem submarine 
fleet and may be seeking to operate an aircraft carrier. The air force 
is developing an extended-range, land-attack cruise-missile-capable 
bomber. However, China must still integrate new doctrinal concepts and 
it also lacks the overseas bases needed for extended operations. 
Although China may not achieve a true regional power-projection 
capability in the next decade, it most likely will increase maritime 
patrols of disputed oil fields and its Exclusive Economic Zone.
    China's space and counterspace capabilities have significant 
implications for U.S. space-based communications, intelligence, 
surveillance, and reconnaissance operations in a Taiwan Strait 
contingency and beyond. Beijing operates communications, intelligence, 
surveillance and reconnaissance, navigation and Earth resource systems 
with military applications and will continue to field more advanced 
satellites through the next decade. In addition to the direct ascent 
anti-satellite (ASAT) program successfully tested in January 2007, 
China also is developing jammers and kinetic and directed-energy 
weapons for ASAT missions. Citing its manned and lunar space programs, 
China is improving its ability to track and identify satellites--a 
prerequisite for ASAT attacks.
    Moving away from its historical reliance upon mass conscription, 
China is trying to build a more professional military workforce--one 
able to engage successfully in modem warfare. The PLA seeks to 
rejuvenate its officer corps, strengthen military education, reform its 
noncommissioned officer corps, improve military quality of life and 
combat corruption. However, the PLA still appears to be encumbered by 
centralized control and a lingering mistrust of individual initiative.
    China is developing missiles of all ranges. The CSS-10 Mod-X-2 (DF-
31A) intercontinental ballistic missile (ICBM) can strike the 
continental United States and is joining China's operational inventory 
along with the less-capable DF-31. Other future ICBMs could include 
some with multiple, independently-targeted reentry vehicles (MIRVs). 
Development continues on the conventional DF-21 (CSS-5) MRBM variants 
which can hold U.S. regional assets at risk.
    China's deployed missile inventory includes nuclear-armed 
intercontinental, intermediate and medium-range ballistic missiles, 
conventional medium- and short-range ballistic missiles and cruise 
missiles. China's nuclear force is becoming more survivable with the 
deployment of DF-31 and DF-31A roadmobile ICBMs and the eventual 
deployment of the JL-2 submarine launched ballistic missile. China 
currently has less than 50 ICBMs capable of targeting the United 
States; however the number of ICBM warheads capable of reaching the 
United States could more than double in the next 15 years, especially 
if MIRVs are employed. China has also fielded over 1,000 CSS-6 and CSS-
7 conventional short-range ballistic missiles opposite Taiwan. It also 
is developing more capable conventional missiles able to range U.S. and 
allied military installations in the region. Chinese conventional 
missile upgrades may include maneuvering reentry vehicles with multiple 
constellation, satellite-aided navigation and terminal guidance.
    China's nuclear weapon stockpile likely will grow over the next 10 
years as new ballistic missiles are activated and older ones are 
upgraded. China likely has produced enough weapon-grade fissile 
material to meet its needs for the immediate future. In addition, China 
likely retains the capability to produce biological and chemical 
weapons.
    Growing capabilities in counterspace, cyber warfare, electronic 
warfare and long-range precision strike could help China achieve 
strategic surprise. Nevertheless, China's security strategy emphasizes 
strategic defense, which integrates diplomacy, economics and 
information with conventional military operations. If Beijing adheres 
to this strategy, we will have indications of Beijing's concerns along 
with warning of imminent crises.
    While Chinese security strategy favors the defense, its operational 
doctrine does emphasize seizing the initiative through offensive 
action, including possible preemptive action. China does not view an 
offensive operational doctrine within the context of a strategic 
defense as contradictory.
    China's total military-related spending for 2007 could be as much 
as $85 to $125 billion. China has made marginal improvements in 
military budget transparency, but the PLA's disclosed budget still does 
not include large costs for strategic forces, foreign acquisitions, 
military-related research and development and paramilitary forces. 
China's accounting opacity reflects a lack of institutional capacity as 
well as an unwillingness to comply with international standards for 
reporting military spending. China also remains reluctant to share 
details about its growing ASAT capabilities.
    China maintains an active presence in the South and East China 
Seas. Chinese operations in the South China Sea (covering areas such as 
the Spratly and Paracel islands) include reconnaissance patrols, 
training and island defense, air defense and service support exercises. 
China also has conducted operations in the East China Sea area, 
including patrols to protect its maritime interests and claimed oil and 
gas resources.
Russia
    Russia is trying to re-establish a degree of military power that it 
believes is commensurate with its renewed economic strength and general 
political confidence. Perceived western encroachment into its claimed 
areas of interest and Islamic or insurgent threats along its periphery 
are driving Russia's current military activities and modernization 
efforts.
    Russia's widely publicized strategic missile launches, increased 
long-range aviation flights and Kuznetsov carrier strike group 
deployment are meant to signal Moscow's continued global reach and 
relevance to domestic and international audiences.
    Russia has made a major commitment of almost 5 trillion rubles to 
its 2007-2015 budget to develop and build new conventional and nuclear 
weapon systems, with Moscow's priority on maintenance and modernization 
of the latter.
    Development and production of advanced strategic weapons such as 
the SS-27/TOPOL-M ICBM and the Bulava-30 Submarine Launched Ballistic 
Missile (SLBM) continues. In April, Russia rolled out the first 
Dolgorukiy-class ballistic missile submarine designed to carry the 
Bulava-30 SLBM which continues testing despite several publicized 
failures.
    Russia is developing a new Iskander weapon system that will 
incorporate the SS-26/STONE short-range ballistic missile and a cruise 
missile. Both missile systems share common launch equipment, command 
and control infrastructure and can engage multiple targets in near 
real-time. In the future, other weapons may be incorporated into the 
Iskander weapons complex such as artillery and multiple rocket 
launchers.
    Russia announced it had deployed three more Topol-M (SS-27) 
roadmobile ICBMs in December 2007 at Teykovo, in addition to the three 
Topol-Ms already on alert there since December 2006. Russian officials 
said they also deployed four more SS-27s in silos at Tatishchevo, 
increasing the total to 48. Russian media reports say Russia flight-
tested its developmental RS-24, a MIRVed version of the Topol-M, twice 
in 2007 and it expects to deploy it in 2009 after several more tests. 
Russia claims the MIRVed Topol-M can penetrate any missile defense.
    Russia retains a relatively large stockpile of non-strategic 
nuclear warheads. Nuclear weapons or material diversion remains a 
concern despite increased security measures. Some nuclear facilities 
and research reactors remain vulnerable to internal theft, sabotage or 
a well-executed terrorist attack. Since the early 1990s, Russian 
scientists familiar with Moscow's chemical weapons development program 
have been publicizing information on chemical agents designed to 
circumvent international arms control agreements and to defeat western 
detection and protection measures. Such work may be continuing today.
    Russia may consider using chemical or even biological agents in 
counterterrorism situations as demonstrated by its use of chemical 
incapacitants to resolve the Dubrovka Theater hostage situation in 
2002.
    Russian conventional force capabilities continue to also grow, 
albeit at a measured pace. Readiness improvements are seen primarily 
among the conventional ``permanently ready forces'' (PRF). Russia has 
increased training and readiness levels in these units above the lowest 
points of the mid-1990s. However, Russia is finding it hard to improve 
training quality and modernize equipment while also increasing 
recruitment and retention rates for the volunteers needed in the PRF 
and the noncommissioned officer cadre.
    Russia unilaterally suspended participation with the Conventional 
Armed Forces in Europe (CFE) Treaty in late 2007 after claiming that 
the agreement was outdated and biased. Moscow seeks to pressure NATO 
members to ratify the adapted CFE Treaty. Russia's refusal to abide by 
treaty equipment limits, provide required treaty data or accept or 
conduct inspections undermines trust and will make it harder to monitor 
key European security issues.
    Russia opposes closer integration of former Soviet countries with 
the west and wants to continue its presence in the so-called ``frozen 
conflict'' areas. Peacekeeping forces in the Georgian separatist areas 
of Abkhazia and South Ossetia and other military forces in Moldova 
continue to be a major source of friction between Russia and respective 
national governments.
    Russia signed more than $10 billion in arms sales agreements in 
2007, marking a second consecutive year of high sales. Russia recently 
signed large contracts with several countries, including Algeria, 
India, Iran, Syria, Venezuela, and Vietnam while new agreements with 
China have declined. Pending sales include advanced weapons such as 
MiG-29M and Su-30MK multi-role fighter aircraft, Gepard and Krivak-
class frigates, Kilo-class submarines, BMP-3 armored infantry fighting 
vehicles, T-90 main battle tanks and advanced surface-to-air missile 
systems.
    Russia will continue to produce advanced fighter aircraft for 
export to countries such as Venezuela, Algeria, India, and Malaysia 
while also seeking additional warplane sales to South America and 
Middle East. Moscow also continues to aggressively market its air 
defense systems, ballistic missile systems and related automated 
command and control systems to Iran, China, Syria, and other countries.
Syria
    Syria is trying to balance a complex mix of objectives throughout 
the region, particularly in Lebanon and Iraq.
    Damascus seeks improved relations with the Iraqi Government while 
at the same time it still harbors Iraqis with ties to insurgents and 
other oppositionists in Iraq.
    Syria also seeks to strengthen its influence in Lebanon through its 
continuing support to Hizballah and other pro-Syrian allies. Its 
primary goal there is to ensure the selection of a president and 
cabinet that will accommodate Syrian interests in Lebanon. With 
significant influence over the Lebanese government, Syria may be able 
to stymie the United Nations' investigation into former Lebanese Prime 
Minister Hariri's assassination. More broadly, Syria wants to protect 
its interests in any Israeli-Lebanese peace deal and in wider Middle 
East diplomatic efforts.
    Internally, Syria is trying to counter domestic Islamic extremists. 
In response to western pressure, Damascus does block some foreign 
terrorist movements from Syria into Iraq.
    With regard to its external defense, Syria was impressed by 
Hizballah's combat performance against Israel in 2006 and likely will 
try to incorporate the terrorist group's small-unit tactics into its 
own military doctrine. In particular, it is trying to emulate 
Hizballah's successful and aggressive use of anti-tank guided missiles 
(ATOMs). While its military remains in a defensive posture and inferior 
to Israel's forces, Syria is upgrading its missile, rocket, antitank, 
aircraft, and air defense inventories. It reportedly has contracted for 
thousands of additional Russian ATOMs. Syria is investing in ATOMs as a 
weapon of choice against Israeli armor and seeks the most capable 
missiles available. Press reports indicate that Syria may give advanced 
anti-tank missiles to Hizballah.
    Syrian military training in 2007 focused on blocking an Israeli 
invasion and reportedly included increased urban and guerilla warfare 
training. Syrian contracts with Russia may also include new MiO-31 and 
MiG-29M/M2 fighter aircraft and 96K6 Pantsyr-S1E self-propelled short-
range gun and missile air-defense systems. Media reports indicate that 
Syria successfully launched an improved version of its SCUD-D ballistic 
missile in 2007; one with greater accuracy and which is more difficult 
to intercept.
    Syria's chemical warfare program is well established with a 
stockpile of nerve agent, which it can deliver by aircraft or ballistic 
missiles. During the past several years, Damascus has continued to seek 
chemical warfare-related precursors and expertise from foreign sources. 
Syria has the facilities and the expertise to domestically produce, 
store and deliver chemical warfare. Syria will continue to improve its 
chemical warfare for the foreseeable future to counter regional 
adversaries.
    Syria also has a program to develop select biological agents as 
weapons. The program is judged to be in the research and development 
stage, with Syria's biotechnical infrastructure capable of supporting 
limited biological agent development. However, Syria is not known to 
have successfully weaponized biological agents in an effective delivery 
system.
    Syria's ballistic missile inventory is designed to offset 
shortfalls in the country's conventional forces. It includes older 
Russian built SS-21 missiles as well as SCUD-E, SCUD-C, and SCUD-D 
missiles. Syria continues to flight test ballistic missiles which it 
views as a strategic deterrent against Israel.
Levant
    The Levant remains tense with the potential for renewed conflict. 
Israel, Hizballah and Syria are internalizing lessons learned from the 
summer 2006 conflict in preparation for a subsequent round. While none 
appear to want fighting to resume now, they all view its likelihood 
over the medium term. The period of high tension between Israel and 
Syria during the summer of 2007 has subsided. Nevertheless, Israel 
remains concerned over Syria's military posture. Similarly, Syria fears 
an Israeli attack. Senior Israel Defense Forces leaders are driving an 
intense effort to fix shortcomings in readiness, training, logistics, 
and combined arms operations identified following the summer 2006 war.
    Iran and Syria jointly continue to support anti-Israel terrorist 
and militant groups in Lebanon and the Palestinian territories. 
However, the alliance between secular Arab Syria and theocratic Persian 
Iran is not a natural one. It may erode if Syria is accommodated 
significantly in any diplomatic agreement with Israel.
    HAMAS' rise to power in the Gaza Strip, the split in the 
Palestinian Authority and the ongoing rivalry between HAMAS and Fatah 
complicate Israeli Palestinian peacemaking efforts. Continued attacks 
on Israel from the Gaza Strip increase the chances of major Israeli 
military action there.
    Since taking control of the Gaza Strip in June 2007, HAMAS has been 
readying itself for an expected Israeli attack by adopting tactics 
similar to those Hizballah used successfully against Israel in Lebanon 
during 2006. Israel believes HAMAS has smuggled into the Gaza Strip, 
mainly through tunnels to Egypt, large quantities of arms and munitions 
which likely include dozens to hundreds of Soviet-era anti-tank 
missiles and possibly man-portable air defense systems. The military 
wing of HAMAS appears intent on transforming itself from a guerrilla or 
terrorist force into a military-style organization like Hizballah.
    The Lebanese military's defeat of Fatah al-Islam militants in 2007 
strengthened that national institution amidst growing instability. 
However, the persistent political impasse over the presidency and 
cabinet, the rearming of militias and Syria's effort to maintain its 
influence in Lebanon are significant destabilizing influences.
    Al Qaeda and other Islamist terrorist groups have tried to develop 
support and operate in Lebanon and the Palestinian territories.
Pakistan
    While Pakistan continues to strengthen its conventional and 
strategic forces, there is growing recognition of the need for more 
effective counter-insurgency and counterterrorism capabilities against 
the extremist threat across the Federally Administered Tribal Area 
(FATA) and Northwest Frontier Province (NWFP).
    This new focus, however, is unlikely to displace India as 
Pakistan's perceived traditional, preeminent threat over the near term. 
Islamabad has adopted a military, political, administrative and 
economic strategy focused on the FATA. Pakistan has added more border 
posts, begun counterinsurgency training, fenced portions of the border 
and seeks to obtain counterinsurgency equipment while also expanding 
paramilitary forces.
    Pakistan lacks the transport and attack helicopters and upgraded 
communication gear needed to prosecute more effective and sophisticated 
counterinsurgency operations. Much of the Pakistani army also lacks the 
knowledge and language skills required to successfully operate across 
the tribal frontier's complicated cultural terrain. While Frontier 
Corps troops understand the culture and region better and speak the 
local language, they have even less equipment and less training than 
the military.
    Although efforts to improve these deficiencies are underway, it 
will take 3 to 5 years before results can be expected on the 
battlefield.
    Recent skirmishes in Swat, NWFP, indicate that when police stand 
and fight, they can counter militant attacks. Because the militants are 
unable to sustain attacks in the face of a military response, they 
often muster enough forces to overwhelm paramilitary and police units 
and then generally break contact before the military is able to engage 
them.
    So far, Pakistani military operations in the FATA have not 
fundamentally damaged al Qaeda's position in the region. The tribal 
areas remain largely ungovernable and, as such, they will continue to 
provide vital sanctuary to al Qaeda, the Taliban, and regional 
extremism more broadly.
    Al Qaeda exploits this permissive operating environment to support 
the Afghan insurgency while also planning attacks against the U.S. and 
western interests worldwide. Together with militant groups, al Qaeda 
uses this sanctuary to train and recruit operatives, disseminate 
propaganda and obtain equipment and supplies. They consider Pakistan's 
army and other Pakistani government interests as legitimate targets. 
Former Prime Minister Bhutto's assassination underscores the threat's 
severity and reach.
    On matters of external defense, Pakistan seeks to maintain 
stability and a balance.of power across the region through continued 
improvements to its nuclear and conventional forces.
    Pakistan continues to develop its nuclear infrastructure, expand 
nuclear weapon stockpiles and seek more advanced warheads and delivery 
systems. We presently have confidence in Pakistan's ability to 
safeguard its nuclear weapons, though vulnerabilities exist.
    Strategic rivalry with India continues to drive Pakistan's 
development of an expanding array of delivery systems, with recent and 
growing emphasis on cruise missiles. Likely as a way of countering 
India's emerging anti-ballistic missile capabilities, Islamabad is 
building cruise missiles such as the Hatf-VII/Babur for ground-launch 
and the Hatf-VIII/Ra'ad for air-launch. Pakistan may pursue other 
launch platforms and missions for these missiles.
    Meanwhile, Pakistan continues to develop the Hatf-II/Abdali short-
range and the Hatf-VI/Shaheen II medium-range ballistic missiles. These 
will join a missile inventory that already includes nuclear- and 
conventionally-armed short- and medium-range ballistic missiles. While 
Islamabad has shown no interest in developing ICBMs, Sino-Pakistani 
space cooperation will likely give Islamabad access to the requisite 
technologies.
    Pakistan is modernizing conventional forces with aircraft from the 
United States, Chinese frigates and fighters and possibly German 
submarines
    Responding to media reports speculating on U.S. unilateral military 
action inside Pakistan's borders, Pakistani representatives have stated 
that any unauthorized military strike by coalition forces on Pakistani 
soil would be considered an ``enemy act.'' Nevertheless, Islamabad 
welcomes intelligence sharing, technical cooperation and equipment and 
armaments in support of its counterterrorism and counterinsurgency 
missions.
Arabian Gulf
    Gulf Cooperation Council (GCC) states remained stable despite 
increased reports of terrorist activity in the region during 2007. 
Saudi Arabia continues aggressive counterterrorism efforts while other 
Gulf Arab states are pursuing modest improvements of their own.
    GCC states remain wary of Tehran's intentions towards Iraq, the 
Levant and among Gulf Shiite, but most are unwilling publicly to 
confront Iran's regional interference or nuclear potential. Gulf 
leaders prefer diplomatic solutions to these issues, fearing that Iran 
could launch retaliatory strikes, cause economic disruption or 
interfere in their internal affairs if it is confronted with military 
force.
    While GCC countries have individually sought to improve their 
defensive capabilities, they have had less success in integrating their 
military capabilities. An example is the unsuccessful effort to 
establish an integrated air defense system.
    Gulf leaders believe that catastrophic sectarian civil war in Iraq 
would likely follow an abrupt withdrawal of U.S. forces. Most harbor 
reservations about Iraqi Prime Minister Nuri al-Maliki's ability to 
represent all Iraqi factions and make progress toward national unity. 
Also, they are highly suspicious of Iran's influence over the current 
Iraqi Government.
Southeast Asia
    The Jemaah Islamiyah (JI) and Abu Sayyaf Group (ASG) are the 
terrorist groups that pose the greatest threat to U.S. interests in 
Southeast Asia. The JI, which is based mainly in Indonesia, works 
regionally with other Islamic extremist and separatist groups, 
including with the ASG, to achieve its goal of establishing a global 
caliphate.
    In Indonesia, elite counterterrorist police units arrested the JI 
leader and a senior operative in June 2007; although other senior 
operatives remain at large. While JI has not carried out a large-scale 
attack in Indonesia since the 2005 attack in Bali, raids by Indonesian 
authorities revealed caches of weapons and explosives--clear signs that 
the group maintains the interest and capability to conduct attacks.
    Elsewhere in Indonesia, the government continues to successfully 
advance the August 2005 peace accord that ended the 29-year separatist 
conflict in the Aceh province, with a former rebel leader elected 
governor during Aceh's provincial elections in December 2006. Still, 
sustained attention and cooperation remain necessary to prevent 
backsliding, particularly given reintegration and economic challenges. 
Sporadic separatist violence in Indonesia's Papua province and low-
level insurgency in Sulawesi pose no serious security threats.
    The Philippine government has successfully sustained a ceasefire in 
its Muslim south with the Mora Islamic Liberation Front (MILF), 
reaching an agreement with the MILF in November 2007 on territorial 
land boundaries for an expanded Muslim autonomous region. However, a 
comprehensive peace accord has remained elusive. Absent the resolution 
of the final obstacles, there is the risk of resumed fighting. While 
Philippine counterterrorism efforts have disrupted some attacks, ASG 
and other terrorists retain the capability to conduct operations.
    Thailand also continues to struggle with entrenched Muslim 
separatist unrest in its southern-most provinces, presenting a major 
challenge for the recently installed democratic government in Bangkok. 
An estimated 2,700 people have been killed in near-daily assassinations 
and bomb attacks since the previous spike in violence, which occurred 
in 2004. Increased military operations in the South since last summer 
have failed to significantly impact the rate of insurgent attacks.
    While the insurgency is indigenous, some local Muslim extremists 
proclaim their solidarity with ``oppressed'' Muslims worldwide. 
Successive Thai governments have failed to reduce insurgent violence in 
the South and address insurgent grievances. Despite Bangkok's increased 
efforts to crack down on insurgent activity, continued high-profile 
attacks underscore rebel resiliency. The military, which remains the 
dominant actor on Bangkok's policy vis-a-vis the south, will have to 
improve its efforts to win ``hearts and minds'' if underlying Muslim 
dissatisfaction is to be resolved entirely.
Africa
    The United States faces no major military threat in Africa, 
although there are serious challenges to our interests.
    In Nigeria, militants threaten western oil interests by attacking 
oil facilities, kidnapping workers, and disrupting production. The 
government seeks a peaceful solution, but no agreement has been reached 
yet and the militants themselves are divided.
    Continuing post-election violence in Kenya underscores the 
fragility of the region's democratic institutions. The stakes are high 
in Kenya as it is a key U.S. ally against transnational terrorism and 
East Africa's major economic power.
    In Sudan, humanitarian concerns in Darfur continue to escalate. The 
government and rebels remain at odds, despite efforts to negotiate a 
peaceful solution. International efforts to deploy an enlarged 
peacekeeping force have yet to be realized. Elsewhere in Sudan, 
tensions are rising over delays in implementing the north-south peace 
agreement.
    Propped up with Ethiopian troops, Somalia's transitional government 
remains shaky and threatened by Islamist and clan insurgents. If the 
government collapses, warlords and others with terrorist affiliations 
are likely to refill the vacuum.
    Tensions between Ethiopia and Eritrea persist, threatening a 
renewal of war between the two countries over a disputed border region.
Latin America
    While the United States presently faces no major military threats 
or challenges across Latin America, a number of concerns endur.
    Despite his defeat in the recent referendum, Venezuelan President 
Chavez continues efforts to expand his power and confront U.S. regional 
influence. His government has expressed a desire to buy submarines, 
transport aircraft and an air defense system. Venezuela has already 
purchased advanced fighters, attack helicopters and assault rifles.
    Colombian counterinsurgency operations have degraded FARC field 
units and operations and led to increased desertions. Drug trafficking 
organizations cooperatively ship cocaine worldwide in an effort to 
maintain their dominant position as global suppliers.
    While Bolivia's Morales continues to consolidate power with 
Venezuelan and Cuban help, continued opposition efforts to derail his 
draft constitution and calls for regional autonomy likely will 
challenge and perhaps destabilize his government.
    The broad support that acting Cuban President Raul Castro receives 
from the military, security services and the Communist Party will 
likely enable him to maintain stability, security, and his own position 
following Fidel Castro's announced exit.
    Raul has displayed a preference for making decisions over the years 
in a collegial fashion. This suggests that the leadership group's 
consensus will inform policymaking. The Cuban military's support for 
Raul Castro shows no signs of reversing.
Ungoverned Regions
    Ungoverned--or undergoverned--areas are territories beyond any 
sovereign nation's control and, as such, lie outside the reach of 
traditional tools of statecraft. They often serve as training and 
recruitment safe havens for terrorist groups, insurgents, maritime 
pirates, criminal networks, gray/black market arms merchants or drug 
traffickers. Populations within ungoverned areas serve as fertile 
recruiting grounds for such non-state terrorist or criminal networks.

                    TRANSNATIONAL ISSUES OF CONCERN

Weapons of Mass Destruction and Delivery Systems
    The proliferation and potential use of WMD against U.S. forces, the 
American people, our allies and interests remains a grave, enduring and 
evolving threat.
    Non-state terrorist networks continue to seek this capability while 
nationstates expand their WMD capabilities and the survivability, 
accuracy, and range of the associated delivery systems.
    Since mid-2006, several U.N. Security Council Resolutions have 
authorized sanctions against Iranian and North Korean nuclear and 
ballistic missile programs. While these actions have impeded some 
acquisition and support efforts, they have not stopped the programs 
themselves. Further frustrating sanction efforts is the inconsistent 
interpretation and enforcement of the resolutions by several key 
nations.
    Motivated by economic and strategic interests, entities in China 
and North Korea continue to supply technologies, components and raw 
materials in support of WMD and missile programs, especially across the 
Middle East and South Asia.
    Such technology transfers have lasting consequences. China's 
provision of solid-propellant missile technology more than 15 years ago 
helped Pakistan develop the Hatf-VI/Shaheen II medium-range and Hatf-
II/Abdali short-range ballistic missiles. Other examples include an 
agreement between China and Turkey regarding a short-range ballistic 
missile (SRBM), Beijing's active marketing of their latest 
developmental SRBM, the P12; and Egyptian SCUD production from North 
Korea.
    While some of these transferred items are proscribed under various 
WMD-related control regimes, many others are dual-use with legitimate 
industrial applications. Examples include: multi-axis computer 
numerically controlled machine tools that have applications in nuclear 
and missile programs, but are also commonly used throughout legitimate 
industry. Specialty metals such as 7000-series aluminum used in nuclear 
and missile programs is also commonly used in aircraft and other 
industries.
    Since 1999, Russia has adopted stronger export control laws and 
amended its criminal code to permit stricter punishment for illegal 
WMD-related exports. Similarly, China has also moved to enact export 
control laws to restrict proliferation of WMD-related materials. 
However, both have been inconsistent in applying these regulations, 
particularly regarding the sale of dual-use technology. When prompted, 
both Russia and China have been responsive to the United States and 
other countries and halted some questionable transactions.
    Non-governmental entities and individual entrepreneurs also remain 
a great concern. These organizations and the proliferation networks 
(front companies, shippers, facilitators) they tie into are often able 
to sidestep or outpace international detection and export control 
regimes. By regularly changing the names of the front companies they 
use, exploiting locations in countries with more permissive 
environments or lax enforcement and avoiding international financial 
institutions, these organizations are able to continue supplying WMD 
and ballistic missile programs to countries of concern.
    Most state programs now emphasize self-sufficiency to reduce 
reliance upon external suppliers which also limits their vulnerability 
to detection and interdiction.
    For example, Iranian weapon makers advertise their ability to 
manufacture guidance and control components, such as dynamically tuned 
gyros. Instead of importing ballistic missile systems, Tehran now 
produces the SCUD-B and -C, Shahab-3 and Fateh-110 even though it still 
depends on outside sources for many of the related dual-use raw 
materials and components.
    While these indigenous capabilities are not always a good 
substitute for foreign imports, particularly for more advanced 
technologies, they prove adequate in many cases.
    Consequently, as some countries forego imports in favor of 
indigenous WMD-related production, they position themselves anew as 
potential ``secondary proliferators.'' One example is North Korea's 
proliferation of ballistic missile systems based on Soviet designed 
SCUD missiles they acquired in the 1980s.
    Even though most advanced nations cooperate against WMD 
proliferation, a number of trends beyond direct government control 
still fuel the threat. They include commercial scientific advances, the 
availability of relevant dual-use studies and information, scientists' 
enthusiasm for sharing their research and the availability of dual-use 
training and education.
    Overall, the threat posed by ballistic missile delivery systems is 
likely to continue increasing while growing more complex over the next 
decade. Current trends indicate that adversary ballistic missile 
systems, with advanced liquid- or solid-propellant propulsion systems, 
are becoming more flexible, mobile, survivable, reliable, and accurate 
while also presenting longer ranges. Pre-launch survivability is also 
likely to increase as potential adversaries strengthen their denial and 
deception measures and increasingly base their missiles on mobile sea- 
and land-based platforms. Adversary nations are increasingly adopting 
technical and operational countermeasures to defeat missile defenses. 
For example, China, Iran and North Korea exercise near simultaneous 
salvo firings from multiple locations to defeat these defenses.
Space and Counterspace
    The growing distribution of space-related knowledge and technology 
largely through commercial uses is helping other nations acquire space 
and space-related capabilities. including some with direct military 
applications.
    Because most space technologies have both civilian and military 
uses, this trend is providing some countries and non-state groups with 
new or more capable communications, reconnaissance, navigation and 
targeting capabilities. Insurgents in Iraq, for example, have been 
captured in possession of commercial satellite imagery available on the 
Internet.
    Russia and China remain the top military space and counterspace 
states of concern. China successfully tested an ASAT missile in January 
2007. Some countries have already deployed systems with inherent ASAT 
capabilities, such as satellite-tracking and laser range-finding 
devices.
    China, Russia, Germany, India, Israel, Japan, South Korea, and 
Sweden seek improved space object tracking and kinetic or directed 
energy weapons capabilities. However, these technologies are costly and 
most countries that want them are not expected to buy them soon. China 
is developing technology that could eventually be used to counter vital 
U.S. space-based navigation, communication and intelligence collection 
capabilities.
    Other states and non-state groups pursue more limited and 
asymmetric responses that do not require large financial investments or 
a sophisticated industrial base. These methods include: denial and 
deception, electronic warfare or signal jamming and physical attacks on 
ground-based space assets.
Computer Network Threats
    The U.S. information infrastructure, which includes 
telecommunications, computer networks and systems, and the data that 
resides on them, is critical to most aspects of modern life in the 
United States. Russia and China pose the most experienced, well-
resourced and capable computer network operations (CNO) threats to the 
United States, but they are not the only foreign entities that do. 
Other nations and non-state terrorist and criminal groups are also 
developing and refining their abilities to exploit and attack computer 
networks in support of their peacetime and wartime military, 
intelligence, or criminal goals.
    The scope and sophistication of malicious CNO targeting against 
U.S. networks has steadily increased over the last 5 years. This is of 
particular concern because of the pronounced military advantages that 
the United States has traditionally derived from information networks. 
Potential adversaries that cannot compete head-on against the United 
States may view CNO as a preferred asymmetric strategy to exploit our 
weakness while minimizing or degrading our traditional strengths.
    China became the largest exporter of information technology in 
2004, surpassing the United States and the European Union. Current 
trends suggest that China will soon become a major supplier to the 
United States. Overseas production provides opportunities for hostile 
actors to access targeted systems by exploiting the supply chain at its 
origin.
    Russia and China have the technical, educational, and operational 
ability to conduct CNO against targeted networks. Russia remains the 
most capable cyberthreat to the United States. Several high-ranking 
Russian military officials have promoted CNO's potential against future 
adversaries. Since 2005, China has been incorporating offensive CNO 
into their military exercises, primarily in first strikes against enemy 
networks. Recent hacking activities emanating from China underscore 
concerns about Beijing's potential hostile CNO intelligence collection 
activities.
Underground Facilities
    Potential adversaries are going underground to deny the United 
States an important military advantage it has held for decades: 
precision-strike from the air.
    Hardened and deeply buried targets (HDBTs) protect the leadership 
and military assets that current and potential adversaries value most. 
They include: command and control functions, WMD and associated 
delivery systems and WMD research and development. HDBTs often feature 
strong physical security, modern air defenses, and networked 
communications.
    The rising importance of HDBTs to potential adversaries grows each 
year. Whether those nations are rogue, major, or emerging powers, they 
increasingly protect their important military and security assets 
underground. This is most true for nations that support terrorism and 
whose potential possession of WMD makes these facilities a special 
concern. Recent and rapid advances in commercially available Western 
tunneling technology helps these nations and non-state actors build 
underground sanctuaries that are effectively immune to the kinds of 
precision-strike weapons used by the U.S. in the 1991 Persian Gulf War.
    In the 2006 conflict in Lebanon, Hizballah complicated Israeli 
targeting by using HDBTs to store weapons, conduct operations and 
launch rockets.
    Major elements of Tehran's nuclear program are protected and 
concealed within hardened and tunneled underground facilities.
    As potential adversaries improve their ability to build underground 
facilities, the United States will find it harder to destroy these 
targets successfully with conventional penetrating munitions.
Advanced and Improvised Weapons
    Improvised munitions and highly-accurate long-range guided weapons 
help non-state actors inflict losses against technologically superior 
opponents at a relatively low cost and with little training.
    These weapons can produce operational and even strategic-level 
effects beyond the battlefield when used to their maximum effect at the 
tactical level and publicized through the media or Internet. This 
provides terrorist and insurgent groups with a magnified politico-
military potential that exceeds their historical norm.
    For example, Hizballah inflicted significant Israeli casualties and 
challenged Israeli ground operations and plans while using scores of 
advanced ATOM against Israeli ground troops and armored vehicles during 
the summer 2006 South Lebanon conflict. Hizballah also heavily damaged 
an Israeli warship with an anti-ship cruise missile, a military 
capability once limited to nation-states and that Hizballah was not 
known to possess prior to the conflict.
    Very advanced and portable anti-tank and anti-aircraft missiles are 
increasingly available to non-state groups through uncontrolled 
exports, falsified end-user statements, gray market transfers, 
ransacked armories and/or direct supply from sympathetic regimes. 
MANPADS were recovered in the Horn of Africa during 2007. These weapons 
can be used in ambush and sniper attacks against high-value and 
lightly-defended targets such as political facilities, vehicles, and 
aircraft.
    The threat posed by improvised and suicide weapons, such as those 
used in Iraq and Afghanistan lies in the relatively low technological 
barrier to their construction, the relative ease in acquiring or 
manufacturing their ingredients and the growing availability of 
information about how to build and deploy them. The variety and 
sophistication of IEDs is largely limited only by the ingenuity of 
those who design, build and emplace them.
Non-State Actors
    When available in combination, advanced weapons, sophisticated 
information technologies, ungoverned spaces and external sponsorship 
give non-nation-state criminal or terrorist groups the chance to 
develop credible military, intelligence and counterintelligence 
capabilities once limited to nation-states.
    Largely unencumbered by traditional internal and external 
governance responsibilities aside from attending to their own 
supporters, these groups can operate beyond the reach of traditional 
state-craft tools such as economic and diplomatic sanctions.
    The premier example is Lebanese Hizballah, a terrorist group 
functioning as a state within a state in South Lebanon. While the group 
runs substantial and diverse social, cultural, economic and political 
programs, it also fields significant and growing military, intelligence 
and counterintelligence capabilities, as it demonstrated in 2006 
against Israel.
    While ideology and political goals drive non-state actors such as 
Lebanese Hizballah, crime is a motivating factor for others. The FARC 
presents formidable intelligence capabilities and the group has access 
to hundreds of millions of dollars from drug trafficking, extortion and 
kidnapping.
    Such non-state actors pose a significant threat to the United 
States mainly because they are less responsive to traditional state-
craft tools. Additionally, when they serve as proxies, these groups 
allow sponsor nations to conduct deniable terrorist, covert action or 
intelligence activities.
    As the proliferation of weapon and information technology 
accelerates, non-state actors will have more opportunities to develop 
very capable conventional and asymmetric military, intelligence and 
counterintelligence abilities, perhaps matching or even exceeding those 
of some advanced nations, including U.S. allies. This could further 
destabilize regions critical to U.S. interests.
Health Security
    Infectious diseases can undermine U.S. national security and 
international economic stability. Pandemic influenza remains a major 
threat, with H5N1 avian influenza lurking in animal populations as a 
potential human pandemic strain. Reluctance by China and Indonesia to 
share avian influenza samples with international health authorities 
limits our ability to track changes in this dangerous virus. Drug-
resistant pathogens, such as tuberculosis, also pose significant 
threats and are amplified in some regions by HIV co-infection. New 
international health regulations may increase visibility of these 
threats; however, lack of laboratory capacity and intentional under-
reporting will continue to hamper efforts to control disease outbreaks.
Crime
    Terrorist and insurgent groups that engage in commercial or 
criminal activity can achieve more autonomy and resilience than groups 
that rely mainly upon external donations. By sustaining themselves with 
locally-derived criminal and commercial proceeds, terrorist and 
insurgent groups can limit some of the constraints and vulnerabilities 
associated with external donor relationships. Conversely, criminality 
can have corrosive and divisive effects on terrorist cadres' internal 
cohesion, ideological commitment and discipline.
    The FARC generates substantial income from the illegal drug trade, 
weapons smuggling, extortion, and kidnapping. Lebanese Hizballah 
receives some funds from associates who profit from the drug trade. 
Some terrorist and insurgent groups in Iraq sustain themselves with 
funds generated from kidnapping, smuggling, oil theft, fraud, and 
extortion. The Taliban also derive substantial operating resources from 
kidnappings and their involvement in Afghanistan's opium production.
                             final thoughts
    The very complex environment in which the U.S operates today is 
full of risk and threats, but also opportunities to influence and shape 
positive outcomes.
    Our allies and potential adversaries are not set to static courses, 
but instead adapt and react quite quickly to changes in our common 
environment.
    While combat operations against transnational terrorists continue, 
other potential threats endure and evolve. Today's current focus 
against the terrorist threat does not foreclose the possibility that 
conflict among major, nation-states could intersect vital U.S. 
interests. Additionally, aspiring or ascending nation-state adversaries 
could present direct military challenges to vital U.S. interests with 
little or no warning.
    As such, defense intelligence must remain able to provide timely 
and actionable intelligence across the entire threat spectrum to 
policymakers and decisionmakers at all levels so they can maximize our 
Nation's opportunities while minimizing its risks.
    In conjunction with the broader Intelligence Community, we have 
important structural and procedural reforms underway within DIA and 
across the defense intelligence enterprise. We are strengthening 
collection while also expanding information sharing across intelligence 
disciplines, agencies and with our closest allies.
    In particular, we are improving the number and quality of our 
defense Human Intelligence (HUMINT) collectors, which prove most 
valuable against the hardest targets. We are standardizing the rigorous 
training for HUMINT collectors within DIA and across the defense 
intelligence enterprise while also improving their collaboration with 
the National Clandestine Service.
    At the same time, DIA is attracting additional employees with 
critical language skills in areas of special interest with expanded 
financial incentives.
    We are also reaching new levels of cooperation with our allies in 
analysis. There is stronger recognition today that no single agency or 
country possesses all the analytic depth needed to solve our toughest 
intelligence and military challenges.
    To strengthen defense intelligence support to customers at all 
levels, we established the Defense Intelligence Operations Coordination 
Center (DIOCC) in October 2007. The DIOCC provides us the ability to 
focus our intelligence collection resources on the intelligence 
priorities of the Department of Defense and the Nation. Operating with 
the National Intelligence Coordination Center, we have the potential to 
integrate and synchronize national, defense and homeland intelligence 
operations and requirements.
    Tying much of this together is the Department of Defense 
Intelligence Information System which provides a secure information 
backbone for the flow of classified knowledge to the U.S. and allied 
defense intelligence communities.
    As a combat support agency, DIA is focusing even more intently on 
providing our regional combatant commanders with the intelligence they 
need to be successful in both combat and global shaping operations.
    We continue to invest in our intelligence professionals through the 
establishment of performance standards and training programs that 
enhance their professional capabilities.
    During this period of change and in the years ahead, your 
continuing support is vital. On behalf of the men and women of DIA and 
across the defense intelligence enterprise, thank you for your 
continuing confidence.
    Our personnel are very proud of what they do. They are honored to 
have the opportunity to work on behalf of the American people. It is a 
privilege for me to serve with them and to have this opportunity to 
share their work with you today.
    Thank you--and I would be pleased to answer your questions at this 
time.

    Chairman Levin. Thank you, General Maples.
    We're going to have a first round of 8 minutes. Because of 
Senator Inhofe's responsibilities as ranking member on another 
committee, I'm going to yield first to him.
    Senator Inhofe. Thank you, Mr. Chairman. I won't use the 
full 8 minutes.
    First of all, nothing was said in the opening statements by 
either of you talking about the Foreign Intelligence 
Surveillance Act (FISA) reform that we're in the process of 
right now. I assume that's because in my opinion we did our job 
in the Senate, but it's now over there on the House side.
    I'd like to have either one or both of you give us a sense 
of urgency as to why this is needed, if it is needed, to go 
ahead and get it done on the House side.
    Mr. McConnell. Senator, there is a sense of urgency. When 
the law expired, several things put us in a situation of 
uncertainty for the future. One, part of the law that was 
passed last August gave us the ability to compel the private 
sector to assist us. The main thing to understand about that is 
we can no longer do this mission and be effective without the 
assistance of the private sector.
    So now the question is, can we compel? Now, there is a 
portion of that legislation that has expired that said as we 
put things in the system with appropriate authorization they 
would run for a year in the future. That's true. But what it 
doesn't account for are changes, new knowledge, new 
personalities, a new service, that sort of thing.
    The other question that we're wrestling with is the issue 
of retroactive liability for the private sector because they 
cooperated with us in the past. The question was how do we deal 
with liability protection. In the bill that passed last August, 
it provided prospective, future protection, but it did not 
address retroactive, and that's the question.
    Senator Inhofe. The immunity issue.
    Mr. McConnell. Yes, sir, and that's the question, because 
what they're faced with is they have a fiduciary 
responsibility, as you're aware, with the bill that passed this 
house with regard to their responsibility of protecting 
shareholder value, and some of these suits are in the billion 
dollar range. So that's the dilemma they face.
    Senator Inhofe. Do you pretty much agree with that, General 
Maples?
    General Maples. Yes, sir, I do.
    Senator Inhofe. In your opening remarks, Director 
McConnell, you talked about the al Qaeda presence in North and 
Central Africa. We didn't say much about in East Africa. I've 
had occasion to spend quite a bit of time there, Uganda, 
Somalia, and Ethiopia. How do you see that? I was pleased with 
the cooperation we got from Ethiopia in going into Somalia. 
Where is that now, in an unclassified form, in terms of the al 
Qaeda threat in that part of northeastern Africa?
    Mr. McConnell. Let me start and I'll hand off to General 
Maples for a follow-up. They were establishing--a year, 18 
months ago, al Qaeda was establishing a footprint in Somalia 
that had the prospects of being formidable. When the Ethiopians 
came in, of course, that was disrupted. For the most part, 
we've been able to keep it tamped down or on the run. We've 
traced personalities. One recently escaped into Sudan and, with 
cooperation there, we were able to detain him.
    So the effort in East Africa was on a growth vector. It is 
now at best sustaining or going down, but it's not growing like 
it was. So it has been a success.
    Senator Inhofe. Good, good.
    General Maples. Sir, the presence is still there. We have 
had tremendous cooperation in that region, particularly with 
Ethiopia. There still of course is a concern and we have 
security interests there that we need to continue to follow. 
The military continues to engage with our partners in that 
region.
    Senator Inhofe. I think Prime Minister Meles has done a 
good job and he certainly has that commitment and talks about 
it.
    Lastly, and this is something you might want to do for the 
record, I was disturbed back in the 1990s when we were 
downgrading our military. During that decade the procurement in 
China--and I believe this is accurate--increased by 1,000 
percent, just totally changed where we were in 1990 as to where 
we are today.
    I think you covered it pretty well, but when you talk about 
there is a nuclear problem, but I'm more concerned, quite 
frankly, which is the conventional buildup that they have right 
now. I can remember when they bought a fleet, and this was 
unclassified, a few years ago of the Su-27s. At that time that 
was better in some ways than our best strike vehicles were.
    So what I'd like to have you do for the record, not to do 
it now, is give us an assessment as to our relative strength in 
both the nuclear and in conventional warfare between the two 
countries between about 1990 and today.
    Mr. Chairman, thank you very much for allowing me to go 
first.
    [The information referred to follows:]

    [Deleted.]

    Chairman Levin. Thank you, Senator Inhofe.
    Director McConnell, the Afghanistan Study Group found that 
2007 was the deadliest for American and international troops in 
Afghanistan since 2001, and that the anti-government insurgency 
has grown considerably over the past 2 years. The Atlantic 
Council report issued last month stated bluntly: ``Make no 
mistake, NATO is not winning in Afghanistan,'' and called the 
situation on the ground a ``strategic stalemate.''
    Do you agree with the Afghan Study Group's assessment that 
overall the insurgency in Afghanistan has grown considerably 
over the last 2 years?
    Mr. McConnell. Sir, we've seen the numbers increase over 
the last 2 years. We've attempted to do a baseline assessment 
so we could capture that, whatever that number is, and then 
compare it. We did a review recently to try to get a better 
understanding of territory that's controlled. Just to give you 
a number so you have a frame of reference, the Taliban was able 
to control the population and the area, about 10 to 11 percent 
of the country. The Government, on the other hand, the Federal 
Government, had about 31 percent, and then the rest of it was 
local control.
    I would say one of the reasons the violence has gone up so 
significantly is because of the more aggressive action on the 
part of the United States and NATO, not all of NATO but much of 
it. So, therefore, the incidence of contact has gone up. What 
we've observed the Taliban to do, because many of their leaders 
have been killed or captured, is they've resorted then to the 
kinds of tactics used by al Qaeda in Iraq, which is a suicide 
bomb or roadside device. That's one of the reasons we've seen 
the incidents and the casualties go up.
    Chairman Levin. So would you say overall that the Taliban 
and their allies are on the run in Afghanistan overall?
    Mr. McConnell. I would say that they've suffered 
significant degradation in their leadership. The way they 
choose to engage, Senator, is if it's a face-off with U.S. or 
NATO forces, they lose. So how they choose to engage is they'll 
fill in an area when we withdraw or they will influence a 
village or a region if our presence is not there.
    So the question becomes--the part I try to make clear in my 
remarks, in my opening statement: The issue becomes, security 
has to be provided, but then it's also governance and 
opportunity that must develop.
    Chairman Levin. Has the anti-government insurgency been 
contained overall, would you say?
    Mr. McConnell. No, sir, I wouldn't say it's contained. It's 
been sustained in the south. It's grown a bit in the east and 
we've seen elements of it spread to the west and the north. 
Now, that's not to say control by the Taliban. It's just 
presence of the Taliban.
    The key, you said it in your opening remarks, Mr. Chairman. 
The key here, in this observer's view, is the opportunity for 
safe haven in Pakistan. If they can operate beyond reach in a 
de facto safe haven in Pakistan, it gives them the ability to 
train, recruit, rest, and recuperate, and then come back into 
Afghanistan to engage.
    Chairman Levin. Directors, were the recent elections in 
Pakistan fair and transparent in your judgment?
    Mr. McConnell. Yes, sir. All the reporting I saw is they 
were, by Pakistani standards, reasonable and fair, and the 
numbers of people voting were a little higher than we 
anticipated, a little higher than average for Pakistan. It was 
over 40 percent.
    Chairman Levin. Would you assess that the elections 
represent a repudiation of Islamic extremism?
    Mr. McConnell. What I would highlight is those Islamic 
extremists that had been serving in the assembly were defeated 
in this election. So at that level, the parties that won are 
more secular. So there is some level of repudiating extremism.
    Chairman Levin. But is there some element of repudiation of 
army rule in the outcome?
    Mr. McConnell. I would agree with that. We're watching very 
closely now to see how the coalition is formed, who the members 
will be, who the prime minister might be. Of the two parties, 
the two largest winners, they will probably form a coalition. 
They've already announced that they would, the Pakistan 
People's Party and former Prime Minister Sharif's party. Sharif 
has an agenda to impeach President Musharraf. Both those 
parties do not have the votes to do that, but if they had 
independents join them they could possibly have the votes.
    Chairman Levin. Senator Inhofe raised the FISA issue and I 
want to just get some facts straight on this. As I understand 
it, last Friday night the last of the private sector partners, 
the telecom partners, agreed to cooperate with us. Was that 
true?
    Mr. McConnell. We've negotiated for 6 days and came to 
closure on Friday night, yes, sir.
    Chairman Levin. So is it true then that as of last Friday 
night they agreed to cooperate with us?
    Mr. McConnell. They did, sir.
    Chairman Levin. On a voluntary basis?
    Mr. McConnell. For the subject matter as a part of the 
debate. The question is the uncertainty going forward, will 
they do it again.
    Chairman Levin. But as to what we were asking them to do, 
they agreed to do it?
    Mr. McConnell. Yes, sir.
    Chairman Levin. Did you notify the White House of that 
agreement?
    Mr. McConnell. As soon as we had the information, we did 
two things: We notified Congress and the White House, and 
issued a press statement.
    Chairman Levin. So that would have been what, Friday night?
    Mr. McConnell. I think it was late Friday night, yes, sir. 
I don't think we had the press statement out until early 
Saturday morning.
    Chairman Levin. Do you remember when you notified the White 
House?
    Mr. McConnell. I'd have to get that time for you, sir.
    Chairman Levin. Would you do that?
    [The information referred to follows:]

    The White House staff was notified at about 8 p.m., Friday, 
February 22.

    Chairman Levin. If we extended the law, would that be 
valuable to you, the Protect America Act? If we extended that 
law, would it be valuable?
    Mr. McConnell. It would do several things for us. It 
wouldn't answer a critical question. What it would do for us is 
it would put the opportunity, the possibility of compelling the 
private sector to help, back in; and it would answer the 
question of prospective liability protection. Of course, what 
it leaves unanswered is the question of retroactive liability 
protection.
    Chairman Levin. But for that issue, would it be valuable?
    Mr. McConnell. Yes, sir, it would be valuable. What we were 
concerned about, of course, is as we engage the carriers and 
they're subjected to this potential huge financial loss, would 
their cooperation be assured in the future? So that's the issue 
that we've been--
    Chairman Levin. But actually, that extension would compel 
their cooperation, wouldn't it?
    Mr. McConnell. It could compel their cooperation. But, sir, 
let me make this very clear.
    Chairman Levin. You say could. It does compel.
    Mr. McConnell. Yes, but let me make clear. Compelling 
cooperation for a specific activity is one thing. Having a 
partner to engage with you in an activity that's dynamic and 
fast-moving and global is another set of conditions. We need 
their participation and partnership in the broader context, not 
just compelling a specific act.
    Chairman Levin. But as a matter of fact, when you say the 
issue is whether we can compel--that's what you just said here 
a few minutes ago--we can compel their cooperation, can't we?
    Mr. McConnell. Not today, no, sir.
    Chairman Levin. If we extended the bill?
    Mr. McConnell. If we extend the bill, yes, sir.
    Chairman Levin. We can compel?
    Mr. McConnell. We can compel. That's what's in the bill.
    Chairman Levin. Do you favor compelling?
    Mr. McConnell. Yes, sir.
    Chairman Levin. I know you favor a broader approach. But do 
you favor a bill extending this law so we can compel their 
cooperation?
    Mr. McConnell. I'm sorry. You're working me into a corner.
    Chairman Levin. I'm doing my best.
    Mr. McConnell. Yes, sir, I know you are.
    Let me be very clear.
    Chairman Levin. But I think you have to also give us 
straight answers here.
    Mr. McConnell. I'm giving you as straight as I can, sir.
    Chairman Levin. Is it valuable that we compel their 
cooperation?
    Mr. McConnell. Congress has a disagreement with the 
administration and I'm trying to give a straight answer. So 
just let me do that, if I may.
    A law that compels is in the interests of this community. A 
law that provides prospective liability protection is in the 
interests of this community to do our job. I would add: It's 
also absolutely essential in this observer's point of view that 
we have the retroactive liability protection, for the same 
reason: We have to have partners that willingly cooperate with 
us.
    Chairman Levin. So it's valuable to have it, that 
retroactive? In your judgment it's valuable.
    Mr. McConnell. Yes, sir.
    Chairman Levin. If in order to achieve that we indemnified 
the companies against liability, would that be valuable?
    Mr. McConnell. I'd have to understand what ``indemnity'' 
means here. If you mean substitution or--there are some issues 
with that, as we've discussed.
    Chairman Levin. But would that be valuable?
    Mr. McConnell. Liability protection would be valuable. Now, 
sir, you're a lawyer and I'm not. If you use a term I don't 
understand I may give you the wrong answer.
    Chairman Levin. If you don't understand it then I won't 
pursue it. If you don't understand ``indemnification''----
    Mr. McConnell. I know what ``indemnification'' is, but 
you're accomplished at this as a lawyer; I am not. So what I'm 
saying is I need liability protection.
    Chairman Levin. That's fine. Thank you.
    I think we're back to the regular order, but on this side 
there is no one present. So who is next on the Republican side? 
I think Senator Martinez was next.
    Senator Martinez. Mr. Chairman, thank you very much.
    I'm not accustomed to being this far up the lineup.
    Chairman Levin. I caught you by surprise. I apologize.
    Senator Martinez. You did indeed, but I'll recover.
    I presume that if it was anything else beyond what you said 
in your opening statement regarding FISA, that you said in the 
questioning, I should invite you to clarify further now if you 
didn't fully. You continue to believe that it is vital for you 
to have the types of protections that were in the Senate-passed 
bill?
    Mr. McConnell. Yes, sir, that's correct.
    Senator Martinez. Which includes retroactive immunity?
    Mr. McConnell. Yes, sir, that's correct. If I could take 
just a second to answer your question, this may be helpful. For 
me this is a fairly simple proposition. What's the purpose of 
this law? Why do we even have this law? When Congress wrestled 
with it in the late 1970s, the purpose was to allow our 
community to do foreign intelligence collection and to protect 
Americans.
    The bill this body passed not only allows us to do foreign 
intelligence, regardless of where we do the intercept of the 
activity--and that was the key because the old law said if you 
obtained it in this country you had to have a warrant, and we 
couldn't keep up with that. So it gives us the ability to do 
foreign intelligence and it provides warranted protection for a 
U.S. person anywhere on the globe.
    So if you strip everything else out of it, why do we have 
this law? Let us do foreign intelligence, let us protect U.S. 
persons. That's where we are and that's what we need to do.
    Now, the mechanics of that is we can't do it without the 
private sector and they're in a difficult situation right now 
because they're being sued for assisting us. That's why I'm 
very strongly in favor of liability protection retroactively.
    Senator Martinez. Which is assistance that they provided in 
good faith, at the request of the government, when they were 
told that in fact the government desperately needed their 
cooperation and that it was legal for them to do so.
    Mr. McConnell. Yes, sir. The words you use are ``good 
faith'' and those are exactly the right words in my view. The 
SSCI worked with us for months to go through every detail, to 
look at all the records and so on. Their conclusion in the 
report they issued was that, one, we can't do it without the 
private sector help; and two, they cooperated in good faith. 
``Good faith'' are the words in the Senate report.
    So I think they captured the right description.
    Senator Martinez. Let me take you to the Middle East and 
the situation in Israel. You discussed it during your 
testimony, and it is clear that the continuing violence against 
Israel--did I understand you correctly to say that in your 
opinion and in your view the cooperation of Iran with terrorist 
organizations like Hezbollah has continued and continues and is 
a----
    Mr. McConnell. Yes, sir. The support from Iran to 
Hezbollah, is one of the principal threats to Israel; 
financial, weapons, and training support are significant from 
Iran to Hezbollah. In addition, what I would highlight is 
Hezbollah has gone to Iran for training, set up training camps, 
and they've taken some of the Shiite militia in Iraq out of 
Iraq, over to Iran, trained them, and then with Hezbollah 
supervision come back into Iraq to attack coalition forces.
    So Iran's behavior here is not only directed against 
Israel, it's also directed against U.S. and coalition forces.
    Senator Martinez. In your estimation that is undiminished?
    Mr. McConnell. There has been some rhetoric that they would 
reduce it. We are currently making a very concerted effort to 
determine if we can prove that there's any reduction, and this 
is the dilemma we have. Their calendar year starts next month. 
When they make weapons, rockets, and so on, they put a date on 
it. Right now we have 2006, 2007, mint condition, but we don't 
yet have one with a 2008 date. Does that mean they haven't done 
it in the last few months or they're waiting to start dating it 
2008 in March? So that's a question we're trying to sort out 
right now.
    Senator Martinez. If we can go to Latin America, and I know 
you discussed the situation in Colombia and the FARC. Some time 
in the recent days President Chavez of Venezuela indicated that 
the FARC was not a terrorist organization. Would you agree with 
me that that is a huge misstatement?
    Mr. McConnell. A huge mistake, yes, sir. He's doing that 
for political advantage and rhetoric. Nothing could be further 
from the truth.
    Senator Martinez. General?
    General Maples. Absolutely agree.
    Senator Martinez. I wanted to continue on that vein. You 
did suggest that in his setback with the referendum, which 
would have made him essentially president for life, I guess----
    Mr. McConnell. Yes, sir.
    Senator Martinez.--that his move towards authoritarian rule 
may have slowed. I've not seen any evidence of that. Obviously, 
to the extent that he did take a huge defeat politically and 
the people spoke clearly, that was a setback. But he continues 
to be an authoritarian ruler and increasingly more so every 
day; is that correct?
    Mr. McConnell. Yes, sir. What we're hopeful of is that the 
opposition that was generated by that vote would generate 
itself in a more forceful way. So his rhetoric is not appealing 
as broadly as it did. So has the tide turned? We don't know. 
We'll stay engaged.
    Senator Martinez. His buildup of military forces, 
equipment, particularly assault rifles, in my estimation goes 
beyond the needs of what Venezuela would need for its internal 
defense.
    Mr. McConnell. Yes, sir, probably three or four times more 
than what he would need.
    Senator Martinez. Does that suggest to you that perhaps his 
intentions are to destabilize neighboring governments, 
particularly Colombia, and to assist the FARC?
    Mr. McConnell. It could very well be.
    General Maples. Sir, I would say on that, though, that for 
the rifles he has been in receipt of, we haven't seen a 
distribution in that direction. We have seen them go into 
armories, and we do hear discussion within Venezuela about 
using asymmetric kinds of capabilities and tactics and 
empowering the population in some way, in a home guard sense.
    Mr. McConnell. So it's really forming--one of the thoughts 
is forming an internal militia to enforce his authoritarian 
rule.
    Senator Martinez. Within the country?
    Mr. McConnell. Within the country, yes, sir.
    Senator Martinez. The recent succession in Cuba of Raul 
Castro to power, I was disappointed in the fact that it seemed 
to be the same old faces in rearranged position, particularly 
folks who present no new ideas or any real indication of 
change. My understanding is that there's been great 
disappointment in the Cuban people, who had hoped for maybe a 
little breathing room.
    My concern now arises, for the first time in some time, 
that we may be viewing an increase in migration in the Florida 
Straits. Have you seen anything regarding that or is there any 
information you can share with us on that?
    Mr. McConnell. We're alert to it. We're concerned about it. 
But nothing we've seen yet. Sir, the way I would characterize 
it is in essence what we're seeing in Cuba is not unlike what 
we witnessed in Russia to some extent, with the older 
generation hanging on. The key in my view is going to be fourth 
generation, and we've seen in some of our collection efforts 
and understanding the fourth generation, they're thinking new 
thoughts and they're asking hard questions. So how do you get 
from the first generation of the revolution to the fourth 
generation, that's going to be the question. What my concern 
is, is there going to be some instability in that process?
    Senator Martinez. But with the current leadership there is 
really no change?
    Mr. McConnell. No change, none.
    Senator Martinez. In policy and attitudes or anything else. 
My information is that there's been also an uptick in 
repression internally. I don't know whether you've seen that as 
well.
    Mr. McConnell. Similar, and the person that Raul brought in 
as his number two is someone older than he is, who was an 
original participant in the revolution. So no change is the 
objective.
    Senator Martinez. A real hard-liner.
    Mr. McConnell. Yes, sir.
    General Maples. Sir, I think that that is something we need 
to watch over the next 6 or 7 months, because I think there may 
be an expectation on the part of the population to see where a 
new presidency will go, and a failure to deliver could increase 
concerns. Something we have to be attuned to, as Director 
McConnell mentioned, is looking for any indicators that the 
dissatisfaction is going to reach a level where a migration 
from the island might take place. We're going to be very 
attuned to looking for those indicators.
    Senator Martinez. There's no question that that is a real 
possibility. My continued interest is in the fact that what the 
goal of our policy towards Cuba would be to see a democratic 
change, and the only concern we have vis-a-vis that you should 
not just fear a mass migration, although that is a direct 
threat to our security and we should view it as such. The fact 
is I think also that there is a tremendous potential for there 
to be political, dramatic political change in the future.
    But thank you very much, both of you.
    Chairman Levin. Thank you, Senator Martinez.
    Senator Sessions.
    Senator Sessions. Thank you.
    Thank you, Senator Martinez. I think we need not to forget 
the Western Hemisphere. You've been very articulate and 
valuable and constructive in your comments about that, and I 
think we should all of us not allow Europe or the Middle East 
to just dominate everything we do, because our neighbors and 
friends are in this hemisphere and we need to have strong ties.
    General Maples, you mentioned perhaps arming in Venezuela 
militias as a strategy of Chavez. It's something like perhaps 
the groups that took over Germany? Are you talking about 
creating a grassroots force that's armed, to be an extension of 
the Chavez regime and are able therefore to intimidate, 
oppress, and suppress any opposition that might occur? Is that 
a concern you have?
    General Maples. Sir, I haven't seen it go that far at this 
point, but certainly with the availability and the number of 
small arms weapons in Venezuela, and we are seeing indications 
of a desire to create some kind of a home guard that could be 
taken in one sense as an asymmetric defensive capability for a 
nation, but on the other hand could be going down the road, as 
you mention, of arming supporters to a leader within a nation. 
The opportunity is there. We haven't seen it move in that 
direction yet. We've seen arms actually go into armories. So 
the arming has not occurred yet, but the potential is there.
    Senator Sessions. He is not a leader that seeks to promote 
democracy. He is an authoritarian leader and apparently he's 
prepared to do anything, including making himself a lifetime 
leader, to maintain his power. I do think it's a very serious 
question.
    You noted Colombia was making some progress against the 
FARC. Two years ago, Senator Specter and I were there. Colombia 
is the longest, I believe, serving democracy in South America. 
It has strong economic growth, very strong ties to the United 
States and trade relations with the United States. Could you 
give a little more detail about how President Uribe is 
progressing in his efforts against the terrorist group FARC?
    General Maples. Sir, Colombia has been very aggressive in 
engaging the FARC. They have not allowed the FARC to have 
secure areas, secure territory. They've taken the fight into 
the FARC's territory. As a result of their aggressive actions 
by their military, very professional military engagement, we're 
seeing increased desertions within the FARC, in addition to the 
losses that they are taking as a result of the military 
engagements that are going on.
    So I think there's a very aggressive attitude that is 
backed up by the employment of a professional military.
    Senator Sessions. Thank you. I know that Colombia for years 
tried to work in a negotiating fashion with the FARC, probably 
wrongly, but at least it demonstrated their commitment to try 
to reach a peaceful solution. Finally, when it became quite 
clear that couldn't happen, I'm glad the leaders of Colombia 
took the strong action that they took, and hopefully that 
progress will continue.
    Do either one of you desire to comment on the impact that 
could occur if the United States does not enact the trade 
agreement with Colombia, our ally, and a very, very strong 
trading partner? There appears to be some unease among members 
of Congress, which I find baffling, utterly baffling, that we 
presumably don't think that Colombia is perfect in everything 
that they've done, but they really seem to be making progress 
and are a legitimate democracy. Any thoughts about that, 
Admiral McConnell?
    Mr. McConnell. Sir, let me introduce Tim Langford. The 
reason I ask him to step up is he is our mission manager for 
Cuba and Venezuela and he just finished a tour in Colombia. So 
he'll have firsthand insight to answer your questions. Let me 
ask him to comment.
    Mr. Langford. Yes, good morning, Senator. In fact, I was in 
Colombia when you and Senator Specter visited. I was running 
the Intelligence Fusion Center assisting the Colombian 
Government.
    To your point, absolutely General Maples is right on 
target. The success that they have had under President Uribe 
has been tremendous. When I first arrived in Colombia in 2002 
and to see where they are now, controlling areas where the FARC 
was, previously had control; taking down high value targets; 
putting the FARC on the run; having tremendous success in 
fighting both terrorists and narcotics trafficking; it really 
is a testament to the joint work that Colombia and the U.S. 
Government have done, with great assistance from both the IC 
and Armed Forces. It really couldn't have been done without 
them. All the testament to President Uribe as an outstanding 
leader.
    The point of the free trade agreement--I departed Colombia 
in August and at that time President Uribe, when he would have 
been visiting security officials, one of the key points that he 
would always make to them is that one of the most important 
things that could be done to codify security in Colombia was to 
approve the free trade agreement because of the jobs that it 
would produce there. So he was very much linking the economic 
security with the domestic security and fighting terrorism.
    Just to speak very briefly on Venezuela, on your point 
about Chavez and arming the populace. He has organized these 
militias. Again, it's very much unclear how structured and how 
organized they are, bringing folks in for Saturday training. As 
the General noted, we haven't yet seen these weapons going out 
to these really ill-structured units yet. We're looking for 
that.
    But again, any time you create a parallel military 
structure it has some implications for your existing military 
structure, which heretofore, up until the late 1990s was one of 
the most adept in Latin America and worked very closely with 
our U.S. military.
    I would liken actually the structure of what he's trying to 
create more to probably what Senator Martinez knows, and that's 
the Committees for the Defense of the Revolution in Cuba. I 
think that's the paradigm that we have there.
    Senator Sessions. Do you consider that a possibly dangerous 
move and direction?
    Mr. Langford. I think it's something that we need to 
monitor very closely, if we actually see these weapons going 
out to them. Again, one of the things that we're looking at 
very closely in Venezuela is the economic policies that are 
being pursued are causing some significant social problems. 
There are food shortages in Venezuela. It's a very wealthy 
country that actually has food shortages. Why? It's because of 
the economic policies and getting the pricing wrong. So that's 
something that we're very much watching to see how President 
Chavez is able to resolve that, as well as get the food to the 
people, because again food shortages are a potential for 
unrest.
    Senator Sessions. Admiral McConnell, just to mention the 
concerns, I think legitimate concerns, of our 
telecommunications industries. According to a column in the 
Washington Post a few days ago, 66 trial lawyers representing 
plaintiffs in these telecommunication suits have contributed 
$1.5 million to Democratic Senators and House Members. So this 
is just some little lawsuit, but apparently they're facing a 
host of lawsuits with a host of aggressive attorneys, and I 
don't think we should treat lightly their concerns.
    I'm glad you were able to negotiate something so you can 
continue that. But I think they legitimately deserve to be 
given assurance they won't be sued when they are simply 
following the written request of the Attorney General of the 
United States of America, authorized by the President, to 
assist the United States Government in a time of need, and 
having been certified that it was done legally.
    So my time is up, but I thank you for working on this and 
taking the time to explain the importance of it. I'm glad the 
Senate did pass that reform that we needed and will fix this 
problem, and I'm amazed that the House continues to be 
recalcitrant and failing to act.
    I thank you, and would offer for the record the letter you 
and Attorney General Mukasey wrote to Chairman Reyes in the 
House explaining why it's ``critical to our national security 
that Congress act as soon as possible to pass the Senate 
bill.'' You go six pages, I believe, of detailing with great 
specificity the problems you face.
    Thank you.
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    Chairman Levin. Thank you, Senator Sessions.
    Senator Graham?
    Senator Graham. Thank you, Mr. Chairman.
    A practical application of FISA in Iraq I think has been 
discussed in the past. I think some time last year there was a 
kidnapping of three American soldiers. Are you familiar with 
this case?
    Mr. McConnell. Yes, sir, last June.
    Senator Graham. Can you walk me through very briefly what 
happened in that case and what can we learn from the problems 
that we found?
    Mr. McConnell. Yes, sir. The kidnapping took place and 
everything, tactical, local--separate, if you would, two kinds 
of communications, wireless, and wire. If wireless, walkie-
talkie, or whatever, we're doing everything possible, so we're 
collecting. Some of those that we believe to be responsible 
engage in communications activity that use wire. Think laptop, 
connection to the Internet, and so on. It's not uncommon, 
because of the configuration of the globe now, it moves the 
path of least resistance, the least cost, the fastest speed--so 
it wouldn't be uncommon for someone in Baghdad talking to 
somebody else in Baghdad for it to go through the United 
States, because it's fiber optics, moves fast.
    Senator Graham. Now, what kind of equipment are they using 
to talk with each other?
    Mr. McConnell. Just standard laptop, anything. Even could 
be a cell phone.
    So now as we worked this problem and we got into it, we had 
an opportunity to get more and better, to have better 
collection and understanding of who the perpetrators are, who 
are they working for, how does the larger group operate. So the 
issue is some of the communications passed through a wire in 
the United States, and at that point in time the law said you 
must have a warrant. So we have to stop and now produce about a 
2-inch document.
    Senator Graham. Let's slow down a bit. We have a 
conversation going on using wire, a wire technology, right?
    Mr. McConnell. Yes, sir, that's correct.
    Senator Graham. Between two people in Iraq?
    Mr. McConnell. Multiple people.
    Senator Graham. Multiple people in Iraq.
    Mr. McConnell. Yes, sir.
    Senator Graham. We believe to be non-U.S. citizens.
    Mr. McConnell. They are non-U.S. citizens, yes, sir.
    Senator Graham. That we believe to be involved in 
kidnapping three American soldiers.
    Mr. McConnell. Yes, sir.
    Senator Graham. Because of the modern world some of these 
connections pass through the United States.
    Mr. McConnell. That's correct.
    Senator Graham. So at that point in time we had to stop the 
battlefield intervention to go get a warrant?
    Mr. McConnell. Yes, sir. Now, there's a situation here 
called emergency procedures. But the key for us, the thing 
that's hard for people to understand, is if you're going to do 
a wiretap in that circumstance the law says, wire in the United 
States, you have to have a warrant. Therefore the requirement 
is probable cause, and in your background you know exactly what 
that is.
    Senator Graham. Right.
    Mr. McConnell. A tough standard. Now, some say, well, just 
go faster; it's an emergency, you can go anyway. You still have 
to provide probable cause standards. So first of all somebody 
has to write it down and justify it and do the research and so 
on. Then it goes to their leadership for signature. It comes to 
me for signature. I send it to the Attorney General for 
signature.
    Senator Graham. How long did this take?
    Mr. McConnell. It probably took us the better part of a 
half day on emergency procedures.
    Senator Graham. Okay. Now, so for that half-day period we 
were unable to listen and track; is that correct?
    Mr. McConnell. You can actually extend it a little beyond 
that. Once we realized it, the issue then becomes what is it we 
need to do. So if you factor all the time in it's a little 
longer than a half day. But yes, sir, that's correct.
    Senator Graham. Have we fixed that in the Senate bill?
    Mr. McConnell. Yes, sir.
    Senator Graham. Okay. That's a good thing.
    Mr. McConnell. The Protect America Act that passed last 
August corrected it.
    Senator Graham. Okay.
    Mr. McConnell. Then expired.
    Senator Graham. Right.
    Mr. McConnell. But the Senate bill fixed that.
    Let me add one other thing, sir. It's very important, and 
this is very important to the American people to understand. 
The Senate bill extended warranted, court-provided protection 
to any U.S. person anywhere on the globe, period. So we protect 
a U.S. person, we do foreign intelligence. The foreign 
intelligence is the issue. That's what we're trying to do, 
unimpeded by the fact we have to stop and work through a court.
    Senator Graham. From this kidnapping episode, we learned a 
very hard lesson, because no telling what we missed, but we 
learned that lesson. Congress came together and passed 
legislation to fix that problem. It's expired. Now we're hung 
up again.
    This is no man's land that we're in, how has it affected 
our ability as a nation to defend ourselves?
    Mr. McConnell. For the past week after it expired we were 
in negotiations with the private sector to add additional 
information. I don't want to be too specific here because now 
the bad guys are listening. But if you're going to pull 
information out of the global infrastructure you have to do it 
surgically. It's lots of stuff, so you want to know how to pull 
it out.
    So once you have a method for doing that, you have to have 
the cooperation of the private sector to enable it. The answer 
initially was, wait a minute, this law has expired, you can't 
compel, we're not sure we're going to do any more than we're 
doing exactly right now.
    So our question was, we have more to add, we have the 
authority, but we have more to add. They said: Not so fast. So 
we negotiated, and we thought we were going to lose it, and as 
of Friday we issued a statement to try to tell everybody what 
was going on. Then Friday night, last Friday night, they said: 
All right, we're going to add in what you've asked us.
    Now, so at the moment we're okay. But the question is what 
happens the next time, or what happens if it's a new 
communications method? Remember, this stuff morphs all the 
time. So the authorities that we have now are for a set of 
capabilities. If there's a new capability there's no authority.
    Senator Graham. So the agreement doesn't get you where you 
need to go in an ever-changing battlefield?
    Mr. McConnell. No, sir. The issue, sir, is we can't keep 
up. This is dynamic. It moves in seconds and minutes, and 
there's no way we can keep up if we have to keep going back to 
the court for authorization.
    Senator Graham. Let's talk about the enemy called al Qaeda 
in Iraq. Why do you think al Qaeda operatives were sent to 
senior Iraqi al Qaeda leaders outside of Iraq? We know they're 
doing that. There are foreign al Qaeda operatives going into 
Iraq. Bin Laden says ``Go to the land of the two rivers''--
Iraq--``this is the great battle.''
    Why are they going to Iraq? What compels al Qaeda to feel 
the need to go to Iraq and fight us?
    Mr. McConnell. Primarily it was to stimulate sectarian 
violence between the Sunnis and the Shiites, and that's what 
they did for most of the----
    Senator Graham. But why are they doing that?
    Mr. McConnell. Ultimately what they would like to see in my 
view is the Sunnis prevail in Iraq, and then that potentially 
provides a base of operations if al Qaeda prevails, a place for 
al Qaeda to operate from.
    Senator Graham. Were they threatened by this concept called 
moderation that was being tried in Iraq? Do you believe that 
would undermine the al Qaeda agenda, if Iraq became a stable, 
functioning government where Sunnis, Shiites, and Kurds could 
live together under the rule of law, a woman could have a say 
about her children? Do they lose if that happens?
    Mr. McConnell. They lose, sir.
    Senator Graham. Do you think they know they lose if that 
happens?
    Mr. McConnell. Oh, yes, sir, they know that. This is 
totally contrary to their point of view, so they would lose.
    Senator Graham. Do you believe Iraq is a battle in an 
overall global struggle or is it an isolated event, uninvolved 
with the war on terror generally?
    Mr. McConnell. It is not isolated. There are lots of 
debates about cause and effect and so on, but stability in the 
Middle East is absolutely essential in the interests of this 
country for the next 30 to 50 years.
    Senator Graham. What would be the payoffs in the region if 
Iraq became a stable, functioning government based upon the 
rule of law, that rejected extremism, denied al Qaeda a safe 
haven, lived at peace with its neighbors, and aligned 
themselves with us in the greater fight? What would be the 
payoff to America in terms of our national security?
    Mr. McConnell. Stability in the region, a check on Iran's 
expansionism, a reliable supply of oil to flow to customers 
around the world, potential spread of democratic values in the 
region to its neighbors. So I see nothing--if Iraq evolved the 
way you just explained it, to me that would be the ideal for 
moderation in the Middle East.
    Senator Graham. Thank you.
    Chairman Levin. Thank you, Senator Graham.
    Director McConnell, Senator Graham went through a 
particular problem that you said was fixed by the Senate bill, 
is that correct?
    Mr. McConnell. Yes, sir.
    Chairman Levin. That problem that he described would also 
have been fixed by the House bill, would it not?
    Mr. McConnell. No, sir, it would not.
    Chairman Levin. Why wouldn't the House bill, if the only 
thing it was short of was retroactive immunity?
    Mr. McConnell. The House bill has many shortcomings, sir. 
I'll give you an example----
    Chairman Levin. I'm not talking about shortcomings. I'm 
talking about that specific problem of the new technology that 
was described. I think everybody wants to give you the power to 
use that new technology. Was that not also provided for in the 
House bill?
    Mr. McConnell. I don't think so, and I'll give you an exact 
answer because I asked my General Counsel to be here to answer 
your question, anticipating it.
    Chairman Levin. I'm talking about that specific problem.
    Mr. McConnell. I'll get you an answer on that specific one. 
Ben Powell.
    Can I take--can I wait for a second, because he just got 
called out, and I'll answer that specific question. I know----
    Chairman Levin. That's the question I want to ask you, is 
whether or not that specific issue that Senator Graham talked 
about, which was fixed in the Senate bill and I think we all 
want to fix, I believe was also fixed in the House bill, and I 
want you to tell me whether or not I'm right on that. Okay?
    Mr. McConnell. I will tell you that as soon as I know for 
sure.
    Chairman Levin. Right, I understand.
    Mr. McConnell. But I don't know absolutely for certain.
    Chairman Levin. Now, you've also indicated that there was 
some intelligence that was missed or may have been missed 
during a 5- or 6-day period after the expiration of the Protect 
America Act----
    Mr. McConnell. That's correct.
    Chairman Levin.--until there was an agreement with the 
telecoms last Friday night; is that correct?
    Mr. McConnell. The private sector partners, yes, sir.
    Chairman Levin. If the Protect America Act had been 
extended and there was no gap, would that 5 or 6 days of lost 
or possibly lost information have occurred?
    Mr. McConnell. Probably not.
    Chairman Levin. Okay. I just want to be real clear on this 
because there have been some suggestions that there were 5 or 6 
days of lost information, that was lost because there was some 
failure on the part of either the House or the Senate to act in 
time, where as a matter of fact there was a willingness--and I 
think you're aware of this--to extend the Protect America Act 
so that there wouldn't have been that gap. You are aware of 
that willingness, are you not?
    Mr. McConnell. Yes, I am.
    Chairman Levin. When the President's statement last 
Saturday was made that we were unable to get cooperation from 
private companies--and he put that in the present tense, that 
the House's refusal to act ``is undermining our ability to get 
cooperation from the private companies''--as a matter of fact 
that cooperation had been obtained the night before, had it 
not?
    Mr. McConnell. I don't know what the President--you're 
talking about what he said on Saturday morning?
    Chairman Levin. Yes.
    Mr. McConnell. I don't know his verb tense on Saturday.
    Chairman Levin. I'll read it to you: ``The House's refusal 
to act is undermining our ability to get cooperation from 
private companies.''
    My question to you: As a matter of fact, that cooperation 
had been obtained the previous night, had it not?
    Mr. McConnell. The cooperation--I can get you the exact 
time, but it was, my understanding, it was late Friday night.
    Can I ask a question of you? The statement you're reading 
from, is that the President's radio address?
    Chairman Levin. Yes.
    Mr. McConnell. The radio address is normally taped on 
Friday morning.
    Chairman Levin. That's correct.
    Mr. McConnell. So I suspect that if there's a disconnect 
that's probably the source of it. But I don't know.
    Chairman Levin. You said before that the White House was 
notified Friday night, and yet they still played that address 
on Saturday morning.
    Mr. McConnell. I'm just highlighting it's taped on Friday 
morning.
    Chairman Levin. I understand.
    Mr. McConnell. I don't know what it said, but----
    Chairman Levin. I'm reading to you what it said.
    Mr. McConnell.--that may be the disconnect.
    Chairman Levin. I'm reading to you what it said. I read it 
to you. In other words, ``The House's refusal to act is 
undermining our ability.''
    Mr. McConnell. Then, sir, I would agree with the words you 
just said. It is. For that period of time----
    Chairman Levin. To get cooperation from private companies? 
It had already been obtained on Friday night. You just told us.
    Mr. McConnell. That's a point of view, and I'll give you my 
point of view.
    Chairman Levin. No, no, no. That's not a point of view. You 
just said a minute ago--
    Mr. McConnell. It is, sir. It is. It is today, it is for 
the future, and it'll get worse over time. That's the point I'm 
trying to highlight.
    Chairman Levin. No, but I'm trying to ask you, did we get 
cooperation from private companies on Friday night? That's my 
question. That's my question.
    Mr. McConnell. We did.
    Chairman Levin. All right.
    Mr. McConnell. But I can also, in answering the question, 
say the way you phrased--you're taking issue with the verb 
tense and the point I'm attempting to observe for you is the 
failure to get this new bill passed is having an impact on our 
operations. It is causing detriment and it will get worse in 
time.
    Chairman Levin. I'm talking about cooperation from the 
private companies.
    Mr. McConnell. That's what I'm talking about, sir.
    Chairman Levin. So you're saying that----
    Mr. McConnell. It will get worse in time.
    Chairman Levin.--that we're not going to get the 
cooperation?
    Mr. McConnell. If we don't have a bill that does three 
things: compel, prospective, and retroactive liability.
    Chairman Levin. Okay, and we have the compel in both bills; 
we have the prospective in both bills; is that correct?
    Mr. McConnell. That's correct.
    Chairman Levin. The issue is whether or not there's 
retroactive liability.
    Mr. McConnell. Retroactive liability.
    Chairman Levin. As to whether or not, you point out, 
whether or not there's liability protection.
    Mr. McConnell. Liability protection.
    Chairman Levin. Which is what you want.
    Mr. McConnell. Forward and backward.
    Chairman Levin. Forward and backward.
    Mr. McConnell. That's correct.
    Chairman Levin. That there was an effort to provide that 
liability protection in the Senate bill.
    Mr. McConnell. The Senate bill, yes, sir.
    Chairman Levin. There was an effort made.
    Mr. McConnell. The Senate bill.
    Chairman Levin. Yes.
    Mr. McConnell. Yes.
    Chairman Levin. There was an effort made to do it other 
than wiping out claims of plaintiffs, was there not? Are you 
aware of that fact?
    Mr. McConnell. I am aware of that, sir, and you and I took 
a sidebar to discuss why that wouldn't work from our point of 
view.
    Chairman Levin. I understand.
    Mr. McConnell. Because what it does--
    Chairman Levin. I understand. But on the indemnification 
issue, you've not yet taken a position on that because that was 
never offered; is that correct?
    Mr. McConnell. I don't yet understand----
    Chairman Levin. All right.
    Mr. McConnell.--what you mean by ``indemnification,'' sir.
    Chairman Levin. We won't go into that. Since you don't know 
what ``indemnification'' means, let me ask you a different 
question.
    I'll ask General Maples about this. It has to do with the 
waterboarding issue, General. Director McConnell has already 
commented on that in a different forum. General, do you believe 
that waterboarding is consistent with Common Article 3 of the 
Geneva Conventions?
    General Maples. No, sir, I don't.
    Chairman Levin. Do you believe it's humane?
    General Maples. No, sir. I think it would go beyond that 
bound.
    Chairman Levin. You testified recently that the approaches 
that are in the Army Field Manual give us the tools that are 
necessary for the purpose under which we're conducting 
interrogations.
    General Maples. Sir, that's correct.
    Chairman Levin. Do the approaches in the Army Field Manual 
give you the tools you need for conducting intelligence 
operations?
    General Maples. Sir, they do, and we have recently 
confirmed that with those who are using those tools on 
operations, just to reaffirm that fact.
    Chairman Levin. Director, relative to the question of Iran, 
do you believe that the Russians would be concerned about 
nuclear weapons in the possession of Iran?
    Mr. McConnell. Yes, sir, very much so.
    Chairman Levin. Why are they providing uranium to the 
Iranians?
    Mr. McConnell. The issue is for activating a reactor for 
generation of electric power, and the negotiation was absolute 
certainty and agreement between the Russians and the Iranians 
that what is delivered is accounted for and used for its 
intended purpose and what is generated in terms of plutonium 
and so on is accounted for and then exported out of Iran, back 
to Russia. So that it was a very concerted effort on the part 
of the Russians to have certainty that what they provided to 
the Iranians could not be turned into fissile material for 
weapons.
    Chairman Levin. But that is not satisfactory to us in terms 
of certainty, I gather; is that correct?
    Mr. McConnell. It causes me to worry, out of observation or 
control. But that was the Russian rationale for how they did 
what they did and the assurances they received. Recall they 
stopped it at one point and negotiated back and forth over 
getting the certainty that would satisfy the Russians for 
providing the nuclear material.
    Chairman Levin. But we're still concerned, despite that 
agreement; is that fair to say?
    Mr. McConnell. Certainly I would be concerned. If it's 
something you don't control you would be concerned about it, 
yes, sir.
    Chairman Levin. Thank you.
    Senator Thune.
    Senator Thune. Thank you, Mr. Chairman.
    Admiral, General, thank you for appearing before us today. 
It sounds like you have exhausted the FISA issue and some of 
the other issues that I had perhaps wanted to ask some 
questions on. But I do have a question I'd like to ask 
regarding the Iraqi security forces, because, General Maples in 
your prepared testimony you discuss the Iraqi security forces 
and their overall improved capabilities in 2007, but you also 
stated in your prepared testimony that the Iraqi security 
forces still suffer from a lack of trained, qualified leaders 
at the tactical level, and you go on to say that this fosters a 
climate in which individuals remain vulnerable to improper 
political and criminal influence.
    Do you have any kind of an estimate at all on when it's 
likely that the Iraqi security forces will be able to stand on 
their own and, as you have said, win popular recognition as a 
legitimate guarantor of the Iraqis' security?
    General Maples. Sir, first of all, I think the Iraqi 
security forces have made great strides, and particularly over 
the course of the last year. The army has grown by 55,000 in 
that time.
    We have also seen that, with an effort to provide 
additional soldiers into the force, that many of the units now 
are well over 100 percent strength in their organizations. 
That, however, does not give the true picture because they are 
still lacking, particularly in the middle grades. They are 
lacking in their NCO corps, the kind of professional leadership 
that really does enable a force.
    I know that that's a great effort right now on the part of 
our forces who are providing training and equipping to the 
Iraqi armed forces. The greatest concern with the Iraqi armed 
forces, of course, are the logistics support, the combat 
service support, and the combat support capabilities that they 
would require to stand on their own. There are a number of 
initiatives that are underway right now to try to improve the 
logistics support to the Iraqi armed forces that are short-term 
processes. I believe that over the course of the next year and 
a half the Iraqis have projected that they will be functionally 
sufficient to be able to support themselves.
    The longer-term issue I think for the Iraqi armed forces is 
when they will reach the capability at a higher end, when 
they'll have a full complement of capability in order to defend 
their borders. For that purpose, they've laid out a 10-year 
plan in order to purchase the arms and equipment that will 
enable them to operate at that level.
    Nevertheless, with the divisions that they currently have, 
11 on the books going to 12, and the strength that they have in 
those units, plus how they have been able, if they are able to 
take advantage of the Sons of Iraq, the CLC groups, and 
incorporate them in some way into the Iraqi security forces, I 
would say that over the course of the next 2 to 3 years they're 
going to have a greater capability to sustain themselves on 
operations.
    They're increasingly able to now certainly take the lead, 
particularly on counterinsurgency operations. The issue is how 
they sustain the force for the longer term.
    Senator Thune. Just in terms of the culture that the 
military--and you mention in your testimony this susceptibility 
or vulnerability to improper political and criminal influence. 
Assuming, say for example, as you have suggested, that their 
capability continues to grow, the numbers continue to grow. If 
they are left on their own, is this going to be an issue that 
is going to really weaken their ability, absent U.S. support, 
to protect the Iraqi people to provide security for the 
country?
    General Maples. I still think it has to be an Iraqi 
solution to this, and therefore we have to grow the quality 
NCOs and officers that they need in the force.
    There is some belief that the passage of the de-
Baathification law may help us in this regard if in fact it 
will enable us to enable members, former members of the Iraqi 
military who have experience in leadership roles, particularly 
from among the Sunni population, and to bring them back into 
the military as NCOs and midgrade officers into the force 
structure. I think that that will help alleviate the problem 
that I allude to or that I state in my statement for the 
record.
    Senator Thune. Admiral McConnell, much has been written 
about the growing capability of cyber space threats. What type 
of cyber space threats do you view as the most dangerous and do 
you think that we're currently prepared to deal with these 
threats on both civil and military sides?
    Mr. McConnell. Sir, we're not prepared to deal with it. 
That's the reason for the initiative. Let me separate the 
threat in terms of exploitation of data, which countries like 
Russia and China and so on will try to capture information and 
take it out of this country. One estimate I've seen is that 
that volume was something in the terabytes, 20 terabytes is 
what I recall, of data that was taken out of Department of 
Defense (DOD), Department of State, universities, companies, 
Congress, and so on. So that's one level of threat.
    The threat that also concerns us a great deal and maybe 
even more so is if someone has the ability to enter information 
systems where they can destroy data, and the destroyed data 
could be something like money supply, electric power 
distribution, transportation sequencing, and that sort of 
thing. So our worry right now is the military is probably the 
best protected, the Federal Government is not well-protected, 
and the private sector is not well-protected.
    So the question is how do we take some of the things that 
we've developed for the military side, scale them across the 
Federal Government, and then the key question will be how do we 
interact with the private sector. That's the process we're 
trying to work through right now.
    Senator Thune. Do you see non-state actors becoming 
credible threats?
    Mr. McConnell. Yes, sir. The issue here is--think of it as 
one global net and the cost of entry is low. You need a few 
people that are gifted in computer sciences, electrical 
engineering, and that sort of skill set, and some computers. So 
you can remotely at some location, if you are good enough, 
enter into a data stream and get access. In terms of 
exploitation, usually if you're in that business you want to be 
able to take something, information, and leave no fingerprints. 
That's pretty challenging. If your objective is strictly to 
break in and destroy, that's less of a challenge.
    So while we haven't seen terrorist groups exhibit this kind 
of behavior as of yet, it's a tool set that's available to 
them. They're talking about it and I suspect at some point they 
will try to have that capability.
    Senator Thune. I want to ask you one other question. I 
guess I want to direct this to General Maples. But it has to do 
with the Chinese anti-satellite (ASAT) test last year which I 
think surprised quite a few people. Do you see ASAT weapons as 
a mature threat, and if not when do you expect them to be a 
serious threat? Then as a follow-on, are these types of systems 
being proliferated?
    General Maples. Sir, of course the launch in January of 
last year was a direct ascent SE-19 by the Chinese. Clearly it 
was effective in the launch that was taken, and we can see 
continued development on the direct ascent kind of capability. 
I don't necessarily see a proliferation of that particular 
direct ascent kind of capability, but there are other kinds of 
capabilities that are ASAT capabilities that we do see a 
proliferation of, some of which are kinetic and belong to 
nations today, some of which are nonkinetic kinds of 
capabilities that would provide either jamming or blinding 
kinds of capabilities, that would threaten our communications 
and our satellite systems.
    Senator Thune. It's also been recently reported that China 
is selling up to 24 J-10 advanced fighter aircraft to Iran. Do 
you see this as an isolated incident or a more troubling trend 
of the proliferation of advanced fighter aircraft?
    General Maples. I think it is a greater trend, and there 
are more nations that are seeking advanced fighter aircraft. 
Chinese export of weapons is also a concern to us.
    Senator Thune. Thank you, Mr. Chairman.
    Thank you very much.
    Chairman Levin. Thank you, Senator Thune.
    Senator Martinez.
    Senator Martinez. Thank you, Mr. Chairman.
    General, Admiral, I see that your General Counsel has 
returned and I would be pleased to give you a moment to answer 
the chairman's question if you're prepared now.
    Mr. McConnell. Yes, sir. Thank you very much.
    Mr. Chairman, if I could ask Ben Powell, our General 
Counsel, to answer your specific question.
    Mr. Powell. As I understand it, the question was what would 
be the effect of the Restore Act--
    Chairman Levin. No, that wasn't the question.
    Mr. Powell. Okay.
    Chairman Levin. The question is whether or not that 
specific fact situation which Senator Graham laid out and which 
the Director said was fixed, was fixed by the Senate bill, 
would that have been fixed by the House bill? That's the 
question.
    Mr. Powell. I think the answer to that is no, and the 
specifics of that: First, what the House bill does is have us 
go to the FISA Court for a court order to authorize our 
initiation of surveillance. So first we would be in a situation 
where we're going to the court.
    There are emergency provisions, to be fair, in the House 
bill that would provide that the Attorney General and the DNI 
could do things on an emergency basis. That's similar to the 
emergency provisions of FISA, which we did, in fact, use in the 
case that Senator Graham laid out. But we would have to have a 
baseline requirement to go with the court order or to go with 
some type of emergency authorization.
    A second issue would be that the House bill contains a 
significant purpose test, which says that if a significant 
purpose of our reason for doing the surveillance is to acquire 
the communications of a U.S. person, we would have to go and 
get a FISA Court order for that.
    That presents us with the issue of--we would certainly be 
very interested to know if somebody who had kidnappped a U.S. 
soldier was communicating with somebody here in the United 
States. So could I certify under oath to a court that a 
significant purpose of acquiring that communication is not to 
determine whether they're communicating with a U.S. person? In 
fact we would be very interested in that.
    The Senate bill says that if ``the purpose'' is to get a 
U.S. person's communications, then in fact you have to get a 
FISA order, but if it's just one of the significant purposes 
that would present some difficulty to us, particularly the 
upfront going to the court.
    As an example of that, under the Protect America Act we 
were required to submit our foreign targeting procedures to the 
FISA Court. We did that with our initial authorization in 
August. Those were approved in January. So the court is very 
diligent. They have numerous questions. They want to make sure 
that they are doing a full and fair review and job.
    So if we have that upfront review before we can initiate 
surveillance or the DNI and the Attorney General need to make 
certain findings before they can authorize it on an emergency 
basis, it makes it very difficult for us to act with the kind 
of speed that we have acted under the Protect America Act while 
the court was reviewing our procedures, which they ultimately 
approved.
    Chairman Levin. So the procedures are not the ones that 
need to be approved; it's the specific intercept, you're 
saying, under the House bill?
    Mr. Powell. Under the House bill, they have a broader 
approval, not necessarily on specific surveillances. It's on 
groups and targets. So it would depend on what this group was, 
did we have an existing authorization that already covered this 
group already approved by the court in place. If we did, 
perhaps we could go up on them, or we'd have to look at an 
emergency type of procedure.
    Chairman Levin. So is the answer it depends on the group, 
then?
    Mr. Powell. In that case, it would depend whether we had 
already gone to the court under those procedures upfront to get 
them, yes.
    Chairman Levin. So is the answer maybe to the question that 
I asked is ``it depends''?
    Mr. Powell. It is a complex area and, unfortunately, that's 
what we're trying to clear up----
    Chairman Levin. I understand. I'm just asking you whether 
the answer to the question is then ``it depends''?
    Mr. Powell. It depends. I would have great concern about 
the significant purpose test, though, because----
    Chairman Levin. Except for the significant purpose test.
    Mr. Powell. The significant purpose test would present----
    Chairman Levin. Other than that, it depends on whether the 
group was already covered?
    Mr. Powell. Yes.
    Senator Martinez. Mr. Chairman, I didn't mean to donate my 
time.
    Chairman Levin. I know you didn't.
    Senator Martinez. But I know this is important.
    Chairman Levin. I appreciate your leniency on that.
    Senator Martinez. May I have your leniency on my time?
    Chairman Levin. Please. Oh, absolutely. You have more than 
my leniency; you have my time. I will yield you my next round 
if you need it.
    Senator Martinez. I know it was an important series of 
questions and I know the General Counsel wanted to provide the 
answer.
    This is for Admiral McConnell and General Maples both, on 
the issue of Kosovo, which has been so much in the news of 
late, their assertion of independence, declaration of 
independence, which the United States has supported, and the 
violence that has occurred thereafter. I wonder if you can give 
us your assessment of the situation in Kosovo, as well as 
NATO's Kosovo Force (KFOR), their ability to respond to the 
violence, and are they sufficient to meet the need that is 
there?
    Mr. McConnell. Sir, the leadership in Serbia, the Prime 
Minister, is determined to roll this back if at all possible. 
So the question is, is he going to be able to prevail, and is 
some level of violence probably going to ensue? We have good 
information that when the U.S. Embassy, the British Embassy, 
and others were attacked, a decision was taken by the 
Government of Serbia actually to pull the police back and allow 
them to be attacked and burn the Embassy and conduct the 
violence that they conducted.
    The forces that are there now can contain a low level of 
violence. If it was extended, it would probably be beyond their 
control. So the question is how determined is the leadership in 
Serbia and will they incite violence at a much higher level 
than we've observed to date.
    Let me invite General Maples for additional comment.
    General Maples. Sir, within Kosovo today we're seeing low 
levels of violence within the Serb enclaves, particularly in 
the southern part of Kosovo, clearly within the ability of the 
KFOR to provide a secure environment. The greater concern is in 
the area of Mitrovica to the north and the area of the Ibar 
River, where you have the largest Serb enclave in the northern 
part of Kosovo. To the north of the Ibar, where you have a 
large Serb population, you have a very different approach to 
and reaction to the situation then we have right now.
    Across the bridge itself that separates the community in 
Mitrovica and to the south, KFOR is very involved. In fact, 
just recently some of the population to the north tried to 
block access into the northern part of the city, across the 
bridge, used barriers and dumpsters to try to do that. KFOR 
removed those to enable access.
    So clearly, at the level that we are at in Kosovo today, 
KFOR is able to still provide a safe and secure environment.
    Senator Martinez. What about Russia's role in this? Are 
they being a helpful agent in the violence, or are they being a 
contributor to the violence?
    Mr. McConnell. They could be much more helpful than they 
are. They're attempting to maintain a strong relationship with 
Serbia and they're attempting to pull Serbia into their orbit, 
into their sphere of influence.
    The leadership in Serbia, the Prime Minister, wants to 
contribute to that progress to be more closely aligned with 
Russia. The President, however, has a different point of view. 
President Tadic is convinced that integration with the European 
Union, Europe, and what's referred to as a European Atlantic 
Alliance, is a better course of action.
    So there's disagreement within the Government of Serbia as 
to what the future course of action is for Serbia and of course 
for Kosovo.
    Kosovo will, given that they establish their independence 
and sustain it, they will align in my view with Europe, not 
with Russia.
    Senator Martinez. In Russia, the upcoming leader, Dmitry 
Medvedev, do you view him in any way independent of President 
Putin, or do you presume what has been reported is pretty much 
as it will be, that he will be someone pretty well guided by 
President Putin?
    Mr. McConnell. Sir, I think conventional wisdom is that Mr. 
Putin will have significant influence. But, interestingly, what 
we took an excursion on is just to look at Medvedev's 
background and what he's saying. If you took at face value what 
he's saying, it's certainly encouraging: rule of law, 
independence of citizens, a right to free speech, business 
entrepreneurship, and private sector growth.
    So all the words sound right. Now we're going to find out 
here when the election happens how much independence there is 
between Medvedev and Putin.
    Senator Martinez. Returning to Latin America, recently 
Venezuela is in a dispute with Exxon over the expropriation and 
lack of adequate compensation filed a lawsuit, and as a result 
of that action President Chavez threatened to cut off oil 
supplies to the United States. My understanding is they provide 
somewhere in the neighborhood of 12 percent of our consumption.
    A twofold question. One, the impact of that to us; and the 
impact to Venezuela if we were to choose not to purchase oil 
from Venezuela?
    Mr. McConnell. Quite frankly, Senator, my view would be a 
greater impact on Venezuela. We have an expert here who can add 
a little bit to this.
    Senator Martinez. Bring him up.
    Mr. McConnell. Yes, sir. But the oil that comes out of 
there is very, very----
    Senator Martinez. High in sulfur?
    Mr. McConnell. Yes, high in sulfur, dense, thick. As I 
understand it, the refineries that can handle that are in the 
United States. There may be one in the Caribbean. So at one 
level, doing this is cutting off your nose to spite your face 
on the part of Venezuela.
    Senator Martinez. He backed off a couple of days later.
    Mr. McConnell. Yes, sir.
    Senator Martinez. But I just wondered if that's a real 
threat to us in fact.
    Mr. McConnell. It has some impact, but oil is fungible and 
right now in Nigeria the production level is down about 500,000 
barrels a day just because of the internal strife. So there is 
a potential area you could start to make it up.
    We've done an analysis recently to find out how much oil is 
in surplus and what's the impact of $100 oil per barrel. Quite 
frankly, it hasn't stimulated investment and created a surplus 
that you would think it would create. Therefore, we're a little 
bit concerned that this 10 to 12 percent could have some level 
of impact. So we're watching it closely.
    Tim?
    Mr. Langford. Just to elaborate on what the Director said, 
Senator, absolutely right. The initial statement again, this is 
not the first time he has made that statement. In fact, 
President Chavez subsequently qualified that to say that he 
would cut it off if we invaded Venezuela.
    So what we see is all the oil that goes to Exxon Mobil, 
some of that is still flowing. That hasn't been fully cut off 
either. There's a variety of reasons why it makes economic 
sense for them to continue to sell to us. As the Director said, 
the refineries are in the United States. If you were going to 
sell in other parts of the world, they would have to sell at a 
greater discount because of the transportation costs and the 
like.
    So the assessment is that cutting off oil would definitely 
have a greater impact on the Venezuelan economy than ours, I 
think that would be our assessment.
    Senator Martinez. Thank you, Mr. Chairman.
    Chairman Levin. Thank you, Senator Martinez.
    Senator Reed.
    Senator Reed. Thank you very much.
    Thank you, gentlemen, for your testimony today and for your 
service to the Nation over the many years.
    There are many fault lines in Iraq. One of them is the 
legislation that is passed, but is somewhat nebulous, that 
depends upon implementation. So I wonder, do you have a sense 
of whether the legislation that was passed with respect to 
reconciliation and oil distribution, et cetera, will have any 
real effect going down the road? Admiral McConnell first and 
then General Maples.
    Mr. McConnell. Yes, sir. The belief of the analytical 
community, if the laws are passed and are effective it's going 
to have a very positive impact. I did a little quick checking 
this morning just to see where those laws are. De-
Baathification has passed. Amnesty has passed. The budget has 
passed. Then the one that we were most worried about was the 
Provincial Powers Act, which now allows elections and local 
government and that sort of thing. We have a report that at the 
last minute, the assembly passes a bill, they have 10 days and 
you have three choices: agree to it, veto it, or abstain and 
then it's law. On the last--at the last hour, it's our 
understanding that Abdul Mahte, one of the members of the 
presidency council, vetoed it.
    Now, if that's in fact the case, that's going to be 
somewhat of a setback. There's also another complication. When 
they passed the amnesty, budget, and the provincial powers, 
they lumped them together. Now, his intent was to veto 
provincial powers, but does that action actually impact the 
others?
    So de-Baathification's passed. That's positive. Hydrocarbon 
revenue sharing has not passed. That's critical to be passed. 
That said, production of oil is up about 500,000 barrels a day. 
They are selling it and there is some level of sharing going 
on. But they need that legislation to codify it.
    So to answer your question, I would say it's essential to 
have those bills passed for reconciliation, and one has passed, 
one hasn't, and there are three that we're trying to understand 
this morning.
    Senator Reed. I think it goes to the point you made, 
though, about effective implementation.
    Mr. McConnell. Yes, sir.
    Senator Reed. When I was in Iraq a few weeks ago, 
Ambassador Crocker and General Petraeus pointed out that there 
is some ambiguity with respect to the reconciliation 
legislation. Does it mean simply fire people and give them a 
pension and that's the reconciliation? Does it mean actually 
bringing them back into the Ministries of Finance and Interior?
    Have your analysts formed an opinion about the probability 
of effective implementation?
    Mr. McConnell. Sir, there's someone behind me that probably 
has a better answer to your question. What we're wrestling with 
is the 7,000 Baathists that were not included----
    Senator Reed. Yes.
    Mr. McConnell. I think that's probably what Ambassador 
Crocker was making reference to. Alan Pino, who's our expert 
for that area, probably has a better answer for you than I do.
    Mr. Pino. Senator, on the de-Baathification law, right now 
they are looking at amendments to ensure that Baathists who 
have already been functioning effectively in the government are 
not fired because of the law. So those should be ready soon, 
but they are not implementing the law until they have those 
amendments completed.
    Senator Reed. So, there is a sense that there's some 
legislative progress, but still we have not turned the corner 
in terms of fully integrating and fully welcoming in this case 
Baathists, and I presume Sunni Baathists, into the government.
    Mr. McConnell. Sunnis, that's the key. I would agree that 
full implementation is when it's effective, and that's in 
process.
    Senator Reed. General Maples, do you have a comment?
    General Maples. Sir, I made a comment earlier about what 
we're looking at in terms of the Iraqi security forces and in 
particular the army today and the issue that we have in the NCO 
corps and middle grade officers, and the potential to enable a 
return of Sunni officers and NCOs to the armed forces, which 
would make a tremendous difference for us.
    So we're not there yet, but hopefully that would enable us.
    Senator Reed. Let me raise another, related issue. You 
don't have to arm folks in Iraq, but we have organized these 
local security forces, the Sunnis principally. My latest 
information, there's approximately 60,000 of these individuals 
who are being paid by the United States and not yet accepted by 
the Shiite government as integrated either into their security 
forces or elsewhere.
    Both you gentlemen, if they can't effectively integrate 
60,000 armed and organized militia forces, that could be a very 
difficult challenge to the government and it could present a 
force in waiting for civil conflict. So again first with 
General Maples, your comments about, can that be done, will 
that be done? What's the indication? Are they doing it?
    General Maples. Sir, I think it's a real key point. The CLC 
groups, the Sons of Iraq, really have made a difference 
locally, and there is a great effort right now to try to 
integrate them into the Iraq security forces. Of course, a big 
part of that is where the payment is coming from. Right now 
from the United States, but ultimately from the Government of 
Iraq.
    We have seen inconclusive trends, I would say. That is, 
there are some acceptance and movement in a positive direction, 
but we aren't at the point where that has been done. I think 
it's one of those matters that is critical for us to be 
inclusive, particularly with the Sunni population, and to bring 
them on board, because not doing so has an extremely negative 
effect.
    Mr. McConnell. Sir, I'd just add a couple things. The Prime 
Minister was pretty negative on this in the beginning. What's 
happened is the CLC groups have been effective in tamping down 
on the insurgency and al Qaeda in Iraq and so on. So I think 
the number you quoted is 60,000. It's probably closer to 
70,000.
    The current thinking is 20 percent will be integrated in 
the government. I think that's been agreed, and then the 
government will attempt to find jobs for the remaining forces, 
so they're not armed groups any more.
    Senator Reed. My understanding from my recent visit was it 
was a roughly 80,000 total, 20,000 effectively, but in Anbar 
province, which is much easier because it's a Sunni province--
in fact, I visited several of our military policemen who are 
training the Iraqi highway patrol. They seem to be part of this 
group that was integrated.
    But south of Baghdad, in these critical mixed areas where 
these groups are located, the integration is not going well.
    Let me quickly change because my time will come to an end. 
Admiral McConnell--and correct me if I'm misstating this--but 
the last NIE that spoke about the status of al Qaeda in 
Pakistan suggested strongly that they have reconstituted 
themselves in many respects, that they have been able to 
recruit individuals who are culturally assimilated to the 
United States and Europe, which makes their ability to conduct 
operations here more credible, their capacity has increased.
    Do you find it troubling, more than 6 years after September 
11, that in fact their capacity seems to be growing and their 
capability to attack us seems to be enhanced over these last 
several months and years?
    Mr. McConnell. Sir, I only would modify a bit of how you 
described it. The three things that they have--de facto safe 
haven, leadership, and the middle management--I agree with. 
They're attempting to recruit those that could assimilate and 
so on. They've been successful at some level, but has yet to be 
determined if they're going to ultimately be successful.
    So you're asking in my view exactly the right question: 
What is it we do about this? The big question for us right now 
is what does the new government in Pakistan do about it? At one 
level, they are talking about at least that at the military 
level, being much more aggressive with regard to going into the 
FATA to address this issue.
    At another level, at the political level, they're having 
dialogue about it's time to open dialogue and negotiate. So 
that becomes the question: What's the right course of action to 
actually be effective in reducing a threat.
    Senator Reed. My time has expired, unless, General Maples, 
you have any additional comment?
    General Maples. No, sir.
    Senator Reed. Can I for the record at least ask the 
question, which is, do you feel you have sufficient human 
intelligence and intelligence, surveillance, and reconnaissance 
capabilities included in this budget that's been proposed and 
what you've asked for that is adequate to the threats that you 
see across the globe?
    Mr. McConnell. Sir, the budget----
    Chairman Levin. If it's a short answer why don't you give 
it now. If not, for the record.
    Mr. McConnell. It's a short answer. The budget's adequate, 
but doing the things you just highlighted are difficult, 
because now you have to recruit, penetrate, all those kind of 
things. So it's a series of actions in progress. We have been 
successful. I'd have to take you to a closed session to give 
you a better understanding.
    Senator Reed. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Chairman Levin. Thank you very much, Senator Reed.
    Senator Sessions.
    Senator Sessions. Let me take a few questions in random 
order briefly. Admiral McConnell, the Senate bill, the Protect 
America Act, passed with more than a two-thirds vote in the 
Senate. It came out of the SSCI 13 to 2, a bipartisan, strong 
bipartisan piece of legislation. You have made it clear today 
and in your letter to the House chairman that this impacts and 
places at risk our intelligence gathering capability.
    I don't think there's any dispute about that. I am very 
disappointed that the House spent a great deal of time in 
trying to issue a contempt of order against the White House and 
didn't have time to pass this legislation. So I think the 
American people need to be concerned about it, and there's just 
no--we've been in this. We know the details, some of which is 
secure, some of which is public. Enough is certainly public to 
make a good decision. I believe we need to keep moving and get 
this thing done soon.
    I'm sure you generally agree that sooner is better than 
later.
    Mr. McConnell. Yes, sir. The more time that we wait, the 
more uncertainty that's created. The phrase I'm using, that I 
think is accurate, is our capabilities will atrophy as we go 
forward.
    Senator Sessions. I think it's very critical.
    General Maples, with regard to Senator Reed's questions 
about these militias that have been such a positive force, the 
Awakening groups, the Sons of Iraq, the CLC groups, that have 
really taken it upon themselves to say, we're tired of this 
violence, we're tired of al Qaeda, let's get this country 
moving in the right direction, seems to me their fundamental 
view. We have supported them.
    I guess my question to you is, there has been some concern 
that that could create sectarian violence. Have you seen any of 
that to date? I'm sure there's always some possibility some of 
these groups might be hostile to one another. But to date, how 
is that going?
    General Maples. Sir, we have not seen them turning to 
sectarian violence. In fact, quite the opposite. There is, I 
believe, a change in psychology among those Sunni groups and 
they really are trying to integrate into the processes and the 
future of their country.
    Now, that said, we are starting to see some of those groups 
which you've talked to, particularly the Awakening movement, 
start to move from simply a gathering and a concern over 
security, to move into the political process and having their 
political interests run into the political interests of other 
Sunni groups. So you start to see some friction within the 
groups.
    We also see a difference as we start----
    Senator Sessions. It's a problem with democracy, isn't it?
    General Maples. Yes, sir.
    But we also see this in the areas where that has been 
successful. That may not be the same model that may be 
applicable in other parts of the country. So as we move further 
to the north, through Diyala and Ninawa Minowa, you start to 
see a different type of structure, less of the family, tribal 
basis to operate from. So you'll have to have different 
structures, different models, in order to bring about the same 
kind of security.
    Senator Sessions. I couldn't agree more. Every area of 
Iraq, just like every area of the United States, is somewhat 
different, and the thought that we can run everything from 
Baghdad through this parliament is wrong. I think the 
grassroots positive progress is a model for success.
    I see General Petraeus has noted that Mosul represents the 
last strongest area of al Qaeda. There's an article in the 
Washington Times today that's with the military in Sharqat, and 
shows that the population there is reevaluating. Captain Sam 
Cook, the commander there, noted: ``They don't want occupation, 
but they don't like the insurgency's foreign links. They don't 
like al Qaeda's thuggery and foreign support, and they're 
totally against Iraqis killing innocent Iraqis.'' He goes on to 
talk about in that northern area in the Sunni city of Sharqat 
that had been a very big problem, they were seeing about a 60 
percent drop in high profile attacks.
    So I guess our hope is that the plan, continuing to focus 
on the northern area, can lead to good results.
    General Maples. Sir, can I just comment too and add to 
that? Because we've talked about the Sunni groups, but there's 
a whole other part of the country that we need to be concerned 
about and that is in the south. In fact, as we move towards the 
prospect of provincial elections in the October timeframe, 
particularly if the bills can be passed and we can start to 
move towards elections, there will be increased competition 
between the Shiite groups in the south as they move for 
position.
    As that is going on, there have been a number of Shiite 
groups that have started down the Awakening line also and 
trying to do the same sorts of things in terms of assimilation 
into the country. There has been resistance to that. In fact, 
many of those groups have been taken on by special groups 
supported by Iran to keep them from moving forward in a 
positive way. So we still need to be concerned on the Shiite 
side as well.
    Senator Sessions. I have no doubt of that. This is a 
delicate thing.
    With regard to waterboarding, I think we've now had an 
official statement that it was used three times, never, General 
Maples, by DOD; is that correct?
    General Maples. Sir, that's correct.
    Senator Sessions. Only three times, against high-value 
targets, after legal review had been conducted, and, I would 
note, before the case Hamdan involving Common Article 3, that 
said that Common Article 3 applied in these circumstances, and 
since that date there has been none. It's been suspended. The 
Attorney General said none will be approved.
    I think it's important for us to realize that where we did 
use some of these tactics, they were only used in a limited 
number of circumstances, against the highest targets, before 
the Common Article 3 case came out.
    Admiral McConnell, let me ask you this. Put on your hat. We 
pay you to think at that high position you have. Kosovo, 
Somalia, Haiti, Afghanistan, and Iraq, all those I think tell 
us that culture is important in creating effective governments, 
and it's a bit arrogant to think that we have the ability to 
virtually overnight in historical terms create perfectly stable 
entities.
    Is that a valid concept? Give us your thoughts on how we 
should think in the future about our capacity to bring dramatic 
change to cultures and civilizations that are not used to it?
    Mr. McConnell. Sir, there will be no dramatic change or 
rapid change. As you highlight, it's generational. So 
addressing the cultural issues, understanding the cultural 
issues, addressing it through a cultural point of view, is 
essential for us to be successful. So I think we have to 
understand and respect those local cultures, if we're going to 
hope to achieve change, particularly with regard to democratic 
institutions. Democracy's hard. It's really, really hard.
    So if you think about it at one level, you're attempting to 
take cultures who normally resort to violence when they have a 
disagreement, to have them resort to dialogue to resolve their 
disagreements. That sometimes is generational for change.
    Senator Sessions. I think that's correct, and we have to 
understand that before we undertake military operations, and we 
understand that if we do undertake them what the difficulties 
we're facing, and the fact that we're going to have to be 
patient and seek progress one step at a time. It's just not 
possible.
    I would just conclude, Admiral McConnell, I remember Mr. 
McLaughlin, who was Acting Director of the Central Intelligence 
Agency (CIA), before our committee told us when we created the 
DNI the real question is who will brief the President and who 
will be responsible if it's wrong. At that point I think it was 
the CIA Director. Now you're the DNI, and CIA is under you, and 
we have an Iran NIE by some committee that somebody appoints, 
that ends up with a couple of State Department people who have 
a political agenda involved in writing this report, you attest 
to it, and it becomes a matter of great national and 
international significance.
    I basically want your opinion, General Hayden's opinion. 
I'm not so interested in some group here making a report within 
the entities. You've indicated some concern about the Iran NIE 
after it's over, and certainly, the IAEA Commission has also. 
Would you give any thoughts about how we as Congress and the 
President can be assured we're getting the absolute decision of 
the top person in an agency on these kinds of issues?
    Mr. McConnell. First of all, Senator, I do brief the 
President 6 days a week and I'm responsible for the output, and 
I can assure you he holds me personally responsible for the 
output.
    With regard to how we close out a NIE, I chair that board. 
There are 16 agencies that participate. General Hayden is 
sitting right to my right or left because of his seniority. We 
went through that process. What I would highlight for you is we 
got ourselves trapped a bit. We created an expectation here in 
Congress that if we did a NIE it would have unclassified key 
judgments.
    Now, if you look back at our history, whatever the number 
is, 200, 300, 400 NIEs, we had never done unclassified key 
judgments, except in the debate surrounding Iraq and the 
terrorist threat to the Homeland. So it was about three NIEs 
that all of a sudden created a normative expectation: If we're 
going to produce a NIE, we're going to have unclassified key 
judgments.
    So what I negotiated with my committees and the executive 
branch is, let's get back to let this community do what we're 
paid to do, which is to collect and analyze foreign 
intelligence, we do it in a classified manner, and we provide 
the results that are classified to our leadership in the 
executive branch and to our overseers in Congress.
    We got that agreed to. It took me several months to 
negotiate that. We agreed in October.
    Let me fast forward to the end of November. We now had a 
NIE that had a significant change. Now, I think the press 
mischaracterized that change. I tried to put some of that in my 
comments today. There are three parts to a nuclear weapons 
program. You have to have fissile material; that's the biggest 
challenge. You have to have some way to deliver it; and you 
have to have a technical design or weapon.
    What that NIE says, if you read it closely, is what they 
interrupted, what they halted, was the design specifics of the 
weapon. They're still doing ballistic missiles and they're 
still doing fissile material.
    So the situation we found ourselves in is we brought that 
group in that you want to hold accountable together, we argued 
and debated for most of the afternoon, and agreed, here are the 
facts that we're going to report to the President. We did that 
on a Tuesday, which was November 27, and the next morning we 
reported to the President.
    The President had an issue: There's a change here that is 
contrary to what you, Mike McConnell, testified to in public to 
Congress. I said: Yes, sir, I understand that and I'm worried 
about it, because if we don't make this public we withheld or 
we lied. So we had a dilemma. What is it? We went into this all 
the time planning to not have unclassified key judgments, so 
when we presented it to the leadership, because of the dilemma, 
it was concluded--it became my decision, but because of the 
dilemma the only thing we could do was to have unclassified key 
judgments and they had to be exactly consistent with the 
classified data.
    Now, at that moment in time we had a real rush on our 
hands, because it's written, there's always a worry about a 
leak. We had not yet notified Congress, we had not yet notified 
our key allies. So we were in a race against time.
    If I had had the foresight to know I was going to be forced 
to do unclassified key judgments because of the circumstances, 
I would have caused the key judgments to be very clear about 
what was stopped and what continued.
    So I'll take responsibility. That's an error in judgment on 
my part. I wasn't clairvoyant or smart or it just happened in a 
way so that I couldn't get ahead of it. So that's my 
responsibility.
    Lesson learned for us in my view is the appropriate policy 
for this community is we do not do unclassified key judgments 
of our classified work. I think that in a couple of mentions: 
one, if it's unclassified it enters a political dialogue. I'd 
rather give you the classified information and you have it, 
Congress has it, the President has it, the executive branch has 
it, and you can argue in the appropriate channels.
    The other thing I worry about is the young analyst who's 
there writing it. We all have a political orientation and if 
you know now that this is going to be written for release to 
the public, does that impact the way you would frame it? I 
don't know the answer to that question. I just, I worry about 
it.
    So I think the appropriate place for us is let's not as a 
normal practice produce unclassified key judgments, and if I 
had to do it over again I would be very specific in how I 
described what was cancelled and what was continued.
    Chairman Levin. Thank you, Senator Sessions.
    Let me clarify one point with Mr. Powell about the FISA. 
You made reference to the difference between ``a significant 
purpose'' and ``the significant purpose'' in the Senate or 
House bill; is that correct?
    Mr. Powell. In the Senate bill I believe it says ``the 
purpose'' is to target, is to acquire the communications of a 
U.S. person, not ``a significant purpose'' or ``the significant 
purpose.''
    Chairman Levin. In the House bill?
    Mr. Powell. In the House bill I believe it says--well, I'll 
pull it right here: ``A significant purpose of an acquisition 
is to acquire the communications of a specific U.S. person.''
    Chairman Levin. In any event, it relates to the purpose 
being to acquire conversations of U.S. persons; is that 
correct?
    Mr. Powell. Correct.
    Chairman Levin. Now, in Senator Graham's statement this had 
to do with adversaries in Iraq talking to adversaries in Iraq; 
is that correct?
    Mr. Powell. In the Iraq soldier situation, yes, I believe 
that's how he referred to it, yes, Senator.
    Chairman Levin. In that circumstance it's our Iraqi 
adversaries talking to Iraqi adversaries; is that not correct?
    Mr. Powell. Correct, but if they're talking to a--certainly 
it would be one of our significant purposes would be to find 
out if they're contacting a U.S. person, which would not just 
be a specific U.S. person in terms of a human being, but also 
of course that includes companies and others also.
    Chairman Levin. In other words, you think that he was 
referring to communications that were targeting U.S. persons? 
That's what you understood from his description?
    Mr. Powell. No, Senator, not at all. The question would be 
is when we go up on somebody overseas and surveil them in this 
case of Iraqi insurgents----
    Chairman Levin. Iraqi insurgent to Iraqi insurgent.
    Mr. Powell. We don't know who they're going to talk to when 
we go up on them. That's the problem.
    Chairman Levin. That was his hypothetical.
    Mr. Powell. I could just say when we cover our adversaries 
we don't know who they're going to call, and that's of course 
one of the key problems and why the Director has talked about 
why we can only target one end. ``Foreign to foreign,'' 
sometimes people use that phrase, but we don't know. It's 
foreign to someplace. A high percentage of the time it's 
foreign to foreign, but at times it may touch a U.S. person or 
contact a U.S. person.
    Mr. McConnell. The reason that we, in working with the 
committee, agreed to ``the significant purpose,'' that makes it 
very clear. Our purpose is foreigners, but if it's ``a 
significant purpose'' you could interpret that to say if the 
foreigner possibly called in to the United States, and I would 
submit that may be the most important call we got that day, but 
it's not the purpose, but it could be a purpose.
    Chairman Levin. You understood from Senator Graham's fact 
situation that that was a significant purpose?
    Mr. McConnell. Senator Graham's situation was pre-Protect 
America Act. We were operating under FISA.
    Chairman Levin. I understand, but you understand that his 
description, the factual description?
    Mr. McConnell. I don't think Senator Graham made any 
reference to ``significant purpose'' at all. In this case the 
way we discussed it, it was all about Iraqis, foreigners in 
Iraq, and the issue was----
    Chairman Levin. Talking to foreigners in Iraq.
    Mr. McConnell. Yes, sir.
    Chairman Levin. You understood that?
    Mr. McConnell. Yes, but----
    Chairman Levin. You understand that's----
    Mr. McConnell. But their communications passed through the 
United States. That's the issue.
    Chairman Levin. Of course, of course, and everyone wants to 
cover them, by the way. There's no dispute on that.
    But you understood that, Mr. Powell, also? When you got 
into the ``significant purpose'' test, you understood that in 
his hypothetical that it was Iraqi persons talking to Iraqi 
persons? You understood that when you gave me that answer about 
``significant purpose''? Did you understand that?
    Mr. Powell. I didn't see it as limited to that situation. I 
was thinking of it as what would we do presented with that 
situation under the House bill and could I certify, because I 
wouldn't know who they're talking to. There's a lot of baggage 
with the ``significant purpose'' test that goes back to the 
pre-2001 amendments to FISA.
    Mr. McConnell. Mr. Chairman, in fairness now--you know 
you're very good at this.
    Chairman Levin. No, I don't know. I must--I'm not at all 
satisfied with the way you handled that question.
    Mr. McConnell. Let me try to----
    Chairman Levin. That's fair enough, but it was very clear 
about that was the factual situation which was laid out for 
you, whether or not----
    Mr. McConnell. But what's important for me to make the 
point is, we talked about June, which is FISA. You're asking 
questions about Protect America Act, which came later, and 
you're putting it in the context of the Senate bill, which 
hasn't been made law yet. So when you ask your questions I 
think those of us listening have to know which point in time 
are you talking about, which law are you talking about, and 
then we can answer.
    Chairman Levin. My question was absolutely specific, 
Director. It was whether or not the Senate version fixed that 
problem.
    Mr. McConnell. It does.
    Chairman Levin. It does, and then I asked you, does the 
House version do it?
    Mr. McConnell. It does not.
    Chairman Levin. No, it depends. Your counsel says it 
depends.
    Mr. McConnell. I believe it sets up a situation where it 
would not in all cases.
    Chairman Levin. It might or might not. That's what your 
counsel says. You call in your counsel, he finally acknowledges 
it depends on something.
    Mr. McConnell. My worry is it sets up a situation where 
we're debating it. So if we're debating it we're not collecting 
it, that's the point.
    Chairman Levin. I understand, I understand. We all want to 
collect it. That's not the difference between anybody. There's 
only one difference that remains that's significant, and that 
has to do with whether or not there's going to be retroactive 
immunity given to telephone companies who allegedly have 
violated the privacy rights of Americans. That's the only issue 
that really remains.
    But you have here, it seemed to me, attempted to make 
another----
    Mr. McConnell. I was making no other point. I would agree 
with what you just said.
    Chairman Levin. All right.
    On North Korea's nuclear program--let me switch subjects, 
and I know it's kind of a lot to ask to move from issue to 
issue the way we do. The IC has made a conclusion here that 
North Korea could have produced up to 50 kilograms of 
plutonium, enough for at least half a dozen nuclear weapons. 
Nuclear experts outside of the government have concluded that 
North Korea could have up to 12 weapons.
    I'm wondering whether your assessment, which says at least 
six weapons, is possibly consistent with the outside assessors 
that they have 12 weapons. Is there any inconsistency?
    Mr. McConnell. There's no inconsistency, sir. If you're 
good at it and you have 50 kilograms, that's enough for 12 if 
you know how to do it. The estimate is they're not very good at 
it, therefore they would take more of it, so the better guess 
is 6, but it could be 12.
    Chairman Levin. But your reference is it's at least six?
    Mr. McConnell. Yes, sir.
    Chairman Levin. Okay. Could be 12.
    Have you taken a look at the conversation that took place 
between a senior North Korean official who's their vice 
minister of foreign affairs, between--when he said allegedly 
something on October 4, 2002, about the existence of a North 
Korean highly enriched uranium (HEU) program? You may remember 
that there was some----
    Mr. McConnell. I do.
    Chairman Levin. Okay. There's some question as to whether 
or not he unambiguously acknowledged that program or whether 
there was some ambiguity in there. Have you concluded as to 
whether it was unambiguous?
    Mr. McConnell. The lack of ambiguity is more an assessment 
on our part of the evidence surrounding what was going on at 
that time.
    Chairman Levin. The lack of ambiguity?
    Mr. McConnell. There is--we have high confidence that they 
had a HEU program, and there's no ambiguity about that in our 
estimation based on the evidence that we had at hand. The 
person you're making reference to was searching for negotiating 
ground and presented a hypothetical. Some interpreted that to 
be an admission and some said, not necessarily an admission. So 
that's the reason there was confusion around what he said.
    One thing I've discovered about North Koreans is they have 
no idea, the idea of truth. It's not in their makeup. So when 
you're having a discussion it's always how am I getting 
advantage and so on.
    Now, our estimate on their HEU program has changed from 
high confidence in 2002 at the time you're making reference, to 
today, when we only make medium confidence, with the exception 
of DIA. The reason for that is the evidence that we saw--and 
when you have a situation like this you have shreds and pieces 
and some level of data--is not as consistent today as it was 
when we made the original estimate. So we have dropped our 
confidence level from high confidence previously to only medium 
confidence today.
    Chairman Levin. Have you looked at the notes of that 
conversation where you say some have interpreted it as being an 
acknowledgment and some have said it's ambiguous? Have you 
reached a conclusion as to whether it was an acknowledgment or 
it was not? No, not you. I'm talking about has the IC, you as 
head of it, have you reached that conclusion one way or 
another?
    Mr. McConnell. I will get you that answer. I just don't 
recall. I'm familiar with it and I read some of the transcript 
data, but I don't know exactly. I just don't remember.
    Chairman Levin. If you could do that for the record it 
would be great.
    [The information referred to follows:]

    [Deleted.]

    Chairman Levin. I want to now switch to the ICBM, the North 
Korean ICBM program. They attempted to launch a Taepo Dong-2 in 
July 2006, which failed apparently. Do you know whether that 
Taepo Dong-2 was a space launch vehicle like the Taepo Dong-1 
satellite launch attempt in 1998, or was it an ICBM? Have you 
reached a conclusion on that?
    Mr. McConnell. I think the IC has a position. I don't 
remember what it is. I just don't recall.
    Chairman Levin. That's fine. We're shifting around here 
pretty quickly, so it's impossible to remember all these 
things. We understand that.
    Mr. Fingar. There's the inherent capability. If you can 
launch a satellite, it can be a ballistic missile. There are 
all kinds of reentry problems to it. On the first one launched, 
they claimed it was a space launch vehicle. On the one that 
failed, I don't believe there was a claim and there wasn't a 
separate assessment other than the inherent capability to be a 
ballistic missile.
    Chairman Levin. All right. Senator Sessions.
    Senator Sessions. I may be the only person in the room 
that's ever gotten a wiretap based on probable cause. I was a 
United States Attorney for 12 years and I think we had two, 
only two, and they're very difficult to obtain.
    Mr. McConnell. I was going to ask you, sir, to explain the 
process to get a probable cause warrant. That is a significant 
undertaking.
    Senator Sessions. The both that we used I think had at 
least 100 pages. You have to take it to some judicial 
authority. They have to examine it and review it, and they have 
their staff review it to make sure there's probable cause 
before the judge will sign off on it.
    Then you have to have a team of agents 24 hours a day 
involved in monitoring the calls, and if you clearly have a 
wife calling about a personal matter you have to turn off the 
machine and not listen to that. But even then, Admiral 
McConnell--and Senator Levin, I think this is important--if a 
call is made to someone you never expected to call, that call 
is recorded, because that's the purpose of the wiretap.
    The purpose of the wiretap is to find out who this person 
is calling, to gather evidence that they may be involved in a 
crime, and you have to have substantial--so to put that kind of 
burden--now, your counsel here, but it's a simple thing 
historically and remains so today: You do not have to have 
probable cause to get a wiretap on a foreign, non-American 
citizen outside the United States. Isn't that correct, for 
intelligence purposes?
    Mr. McConnell. We're back now to the situation, if it's not 
already in the books for Protect America Act, we're back to a 
situation where we would have to produce a probable cause 
standard to get a warrant if it's a foreigner in a foreign 
country talking to a foreigner, if the place of the intercept 
is in the United States on a wire.
    Senator Sessions. That's what the Patriot Act had to fix. I 
admit that's because of the possibility it went through the 
United States.
    But the simple question is, you are not required by law to 
have to have probable cause to participate in intelligence 
gathering of foreign people outside the United States?
    Mr. McConnell. If I intercept it in a foreign country.
    Senator Sessions. Right.
    Mr. McConnell. If I intercept it here----
    Senator Sessions. That's the historic principle and it's 
not been changed.
    Mr. McConnell. That's correct.
    Senator Sessions. That's the way, and so we have the 
technical problem of a call might be routing through the United 
States and that causes a technical problem. But I'm trying to 
focus just on the simple principle, because I think we need to 
understand we're not overreaching here.
    So if you have a wiretap on a drug dealer in the United 
States or a Mafia person and they call someone to discuss 
something that you never heard of, some other American citizen 
in the United States, of course you listen to it. That's what 
the wiretap is for, to find out who he is talking to.
    Now, if you have a legal right to tap a terrorist in Iraq 
and they call to the United States, I think it's plain to me 
that you have a right to tap that phone. You've established a 
legal authority to tap that phone. So then it comes up, what if 
you know that person in Waziristan or Baghdad periodically 
calls different people in the United States? One of your 
purposes is to listen to that call because it might be the 
message to blow up some building and kill Americans. You want 
to know that call. Then I think, isn't that the reason you 
couldn't accept the ``a purpose'' of the call, ``a purpose''--
--
    Mr. McConnell. Yes, sir.
    Senator Sessions. --because one of your purposes would be 
hopefully to pick up a call that might help identify a 
terrorist cell in the United States?
    Mr. McConnell. Yes, sir, that's correct. I would add that 
the bill that was passed on the Senate side, and it's actually 
included in the Protect America Act, is if we were targeting 
someone inside the United States for foreign intelligence 
purposes, we get a warrant. So if it's strictly foreign and he 
happens to call in, I have a situation where I must--I can use 
the information if it's of intelligence value. I can report it. 
I camouflage the identity of the U.S. person, but I can report 
it, and if it is of no intelligence value, then I have to 
minimize it.
    So the situation was accommodated in either case to ensure 
the protection of the civil liberties of Americans.
    Senator Sessions. So I think a significant purpose of the 
intercepting of a terrorist phone call in Iraq, listening in on 
those numbers, may get you by, although that might sometimes 
cause you a problem. But any purpose of it, I think every time 
you're listening in on a terrorist who may be leading an 
organization, one of your purposes would be to hear if they 
make calls into the United States.
    Mr. McConnell. The purpose would be to collect information 
on the foreign target. A purpose could be if he is activating a 
cell. That's why we were very specific----
    Senator Sessions. I think you were correct to make that 
clear and be firm on that. I'm glad we agreed in the Senate by 
more than a two-thirds vote and we passed it. It's time for the 
House to get busy and work this thing out and move us forward 
and make these rules permanent so you can have confidence.
    Thank you, Mr. Chairman.
    Chairman Levin. Thank you.
    Just to clarify that, if there's a call being made by a 
terrorist that you believe is a terrorist, not through this new 
technology, just a direct call to somebody in the United States 
on a regular pay phone, you need to get a warrant for that?
    Mr. McConnell. It depends on where I intercept it, sir. It 
depends on where I intercept it.
    Chairman Levin. In the United States.
    Mr. McConnell. If I got it in the United States and it's 
not already pre-loaded, I would have to have a warrant.
    Chairman Levin. You do?
    Mr. McConnell. Under today's rules.
    Chairman Levin. Well, no, even under the Senate bill?
    Mr. McConnell. Under the Senate bill, if it originated in a 
foreign country and it's a foreigner I do not have to have a 
warrant.
    Chairman Levin. If it comes into the United States on a 
regular pay phone?
    Mr. McConnell. What do you mean, ``regular pay phone''?
    Chairman Levin. A regular phone, not--it's not routed to--
--
    Mr. McConnell. A regular phone wouldn't be any different 
from any other phone.
    Chairman Levin. Okay, it's not routed to somebody outside 
of the United States. It's a call made to somebody----
    Mr. McConnell. To a pay phone here in the United States?
    Chairman Levin. To a phone here in the United States.
    Mr. McConnell. I would not have to have a warrant under the 
Senate bill.
    Chairman Levin. How about under the House bill?
    Mr. McConnell. Under the House bill, it depends.
    Chairman Levin. Okay.
    Mr. McConnell. Can I give you an example?
    Chairman Levin. So the new routing issue, this new 
technology where it's being routed through the United States to 
a foreign person or to a foreign point, that's not just the 
issue here, then? In other words, the argument has been that 
there's new technology, and it's been described publicly, where 
a foreign call is routed through the United States.
    Mr. McConnell. Foreign to foreign, yes, sir.
    Chairman Levin. Foreign to foreign.
    Mr. McConnell. Right.
    Chairman Levin. That if it were foreign to foreign without 
being routed, you wouldn't need a warrant under the old law.
    Mr. McConnell. Under Protect America Act.
    Chairman Levin. Under the old law, if it was not routed 
through the United States.
    Mr. McConnell. No warrant.
    Chairman Levin. You don't need a warrant.
    Mr. McConnell. Even under old FISA.
    Chairman Levin. Under old FISA.
    Mr. McConnell. Agreed.
    Chairman Levin. Because there's a new technology where it's 
routed through the United States----
    Mr. McConnell. Under old FISA, warrant; under Protect 
America, no warrant.
    Chairman Levin. Exactly right. I think everybody wants to 
correct that problem. That is not the issue and it shouldn't be 
made the issue.
    So now you do not have this new technology under my next 
question. You have old technology being used. Is there any 
change you need relative to old technology being used?
    Mr. McConnell. The change--the way it's described in the 
Senate bill----
    Chairman Levin. You need a change in law on that.
    Mr. McConnell. In the Senate bill--it depends. Let's go 
back to old FISA. If I'm intercepting it overseas, no warrant. 
If I'm intercepting it in the United States, warrant.
    Under Protect America Act, because I'm targeting overseas, 
no warrant. Under the Senate bill, no warrant, because my 
purpose is foreign.
    Chairman Levin. All right, even though it comes into the 
United States.
    Mr. McConnell. That's correct.
    Chairman Levin. All right. If a purpose is to overhear a 
conversation to an American, it's foreign to American and 
that's your purpose, do you need a warrant? The answer would be 
yes under the House bill.
    Mr. McConnell. House bill. No under the Senate bill.
    Chairman Levin. If that is a purpose.
    Mr. McConnell. A purpose. The purpose, okay.
    Chairman Levin. That's correct. If a purpose, however, is 
to intercept a phone call coming from overseas to an American 
citizen, if a purpose, under the House bill, you then have to 
go and get a warrant?
    Mr. McConnell. That's correct. The way you're describing it 
here, the ``a'' in this case could be a hypothetical. So what 
that introduces is uncertainty, and now you're in a debate 
about it. So that's why we tried to hold the line on ``the 
purpose.''
    Chairman Levin. Right.
    General, just one last question for you. I wrote you on 
December 21, 2007, requesting that you declassify two DIA 
documents. You're still waiting on the CIA to complete its part 
of the review before you can get me the material. A great deal 
of similar material has already been reviewed and declassified, 
so this is not new ground.
    Do you know why the CIA has not completed this 
straightforward review for more than 2 months?
    General Maples. Sir, I'm not aware specifically of their 
reason. We are in direct contact with them and with your staff 
right now to try to facilitate a response to you. I did get a 
response back from them that they anticipate having something 
to me in the near term, and I mean within about a week, and 
which we'll immediately respond and turn your response back to 
you.
    Chairman Levin. I want to go back to this probable cause 
issue as well, just to clarify that. Under the Senate bill, if 
the purpose is to intercept a conversation to an American here 
and the intercept takes place here----
    Mr. McConnell. If the purpose, I have to have a warrant.
    Chairman Levin. You have to establish probable cause.
    Mr. McConnell. Yes, sir, probable cause and a warrant if 
the purpose.
    Chairman Levin. A warrant.
    Mr. McConnell. A warrant.
    Chairman Levin. The same difficulties of establishing 
probable cause exist.
    Mr. McConnell. Sure, and appropriately so.
    Chairman Levin. I think we all agree that it's appropriate. 
So I just want to make clear that under either bill, under 
different tests, that if it's the purpose one time then you 
have to get probable cause; if it's a purpose, under the House 
bill you have to establish probable cause. But in either event, 
there are circumstances in both bills where, even though it's a 
call coming in from a terrorist to the United States, 
intercepted in the United States, you must establish probable 
cause.
    There are circumstances in either bill--I'm not saying it's 
the same circumstances.
    Mr. McConnell. There's a nuance here you need to 
appreciate, sir. You can only target one or the other. If I'm 
targeting foreign, no warrant.
    Chairman Levin. Got you.
    Mr. McConnell. Now, if I target in this country I have to 
have a warrant.
    Chairman Levin. That's true, that's true under both bills.
    Mr. McConnell. That would be any time I target a U.S. 
person I have to have a warrant.
    Chairman Levin. Even though the call comes from a foreign 
terrorist?
    Mr. McConnell. But sir, you can't target--that's the part 
of the technology you're not----
    Chairman Levin. I'm not talking about the new technology.
    Mr. McConnell. Any technology. Remember, I can only--think 
of it takes two telephones to talk. I can only target one or 
the other. So I'm targeting foreign; I don't know who he's 
going to call. He could call a foreigner, he could call an 
American, he could call wherever.
    Chairman Levin. I understand, I understand that. But I'm 
saying if the call is coming in----
    Mr. McConnell. Coming in.
    Chairman Levin. --from a foreign source that is a terrorist 
source----
    Mr. McConnell. No warrant because I'm targeting a foreign 
source, because I can only do one. I can only target one end. I 
can't control who he calls.
    Chairman Levin. Okay.
    Mr. McConnell. Now, if I am targeting inside, that's my 
target, that's the phone number I'm going to go after, I have 
to have a warrant.
    Chairman Levin. If the significant purpose of targeting 
that foreign source is an American, is an American----
    Mr. McConnell. If it's the purpose----
    Chairman Levin. If it's the purpose.
    Mr. McConnell. --got to have a warrant.
    Chairman Levin. Then you have to go and get a warrant.
    Mr. McConnell. That's correct.
    Chairman Levin. If that's the purpose.
    So all I'm saying is under either bill there are 
circumstances where you must establish probable cause and go to 
a FISA court.
    Mr. McConnell. There are--in either bill, I must do 
probable cause if I'm targeting a U.S. person.
    Chairman Levin. Under either bill.
    Mr. McConnell. Yes, sir.
    Chairman Levin. The probable cause difficulty is the same 
always? Probable cause is probable cause.
    Mr. McConnell. We should be required to do probable cause 
any time we target----
    Chairman Levin. I hope everybody would agree on that.
    Mr. McConnell. Yes, sir.
    Chairman Levin. I think everybody would agree.
    Mr. McConnell. But we're arguing as hard as we can that we 
shouldn't be going to a probable cause standard to target a 
foreigner in a foreign country.
    Chairman Levin. We got it.
    I won't ask if there's any other questions because I'd be 
asking myself. We thank you both. It's been a long hearing and 
I hope a useful hearing. We appreciate your attendance and your 
patience. We will stand adjourned.
    [Questions for the record with answers supplied follow:]

               Questions Submitted by Senator Carl Levin

               INTERROGATION PRACTICES--ARMY FIELD MANUAL

    1. Senator Levin. Director McConnell, the Intelligence 
Authorization Act approved by Congress includes a requirement that all 
elements of the Intelligence Community (IC) follow the Army Field 
Manual (AFM) on Interrogations. The AFM on human intelligence (HUMINT) 
collection operations prohibits a number of specific actions from being 
used for interrogations, including waterboarding, forced nudity, 
beatings, use of military working dogs, and mock executions. The AFM 
requires treatment consistent with Common Article 3 of the Geneva 
Conventions, which prohibits ``cruel treatment and torture'' and 
``humiliating and degrading treatment.''
    You testified to the Senate Select Committee on Intelligence 
earlier this month that you didn't believe the AFM would be appropriate 
for use by the Central Intelligence Agency (CIA) because the AFM is 
``designed for a specific purpose, for men in uniform, generally 
younger, less experienced, and less trained'' than CIA interrogators. 
What did you mean when you said that the AFM on Intelligence was 
designed for ``a special purpose''? Isn't it designed to collect 
intelligence?
    Mr. McConnell. The United States AFM on Interrogations was designed 
to meet the needs of America's military. The AFM was not designed with 
the sole focus on interrogation of senior al Qaeda terrorists who may 
have information necessary to disrupt an attack on the Homeland. The 
AFM was intended to cover detainees who Department of Defense (DOD) 
personnel may encounter worldwide--many of whom enjoy the full 
protection of the Geneva Convention as uniformed military personnel 
complying with the laws of war.

    2. Senator Levin. Lieutenant General Maples, what is your 
understanding on why the AFM prohibits waterboarding?
    General Maples. Paragraph 5-75 of Field Manual 2-22.3, Human 
Intelligence Collector Operations, prohibits the use of waterboarding 
in conjunction with intelligence interrogations. This manual was issued 
on 6 September 2006 and reflects the statutory mandate of the Detainee 
Treatment Act of 2005 that no individual in the custody or under the 
control of the U.S. Government shall be subject to cruel, inhuman, or 
degrading treatment or punishment. Waterboarding is not consistent with 
this standard.

    3. Senator Levin. Lieutenant General Maples, do you believe that 
waterboarding is consistent with Common Article 3 of the Geneva 
Conventions? Is it humane?
    General Maples. As I stated during the hearing, I do not believe 
that waterboarding is consistent with common Article 3 of the Geneva 
Conventions, nor do I believe it is humane.

    4. Senator Levin. Lieutenant General Maples, you testified recently 
that ``the approaches that are in the AFM give us the tools that are 
necessary for the purpose under which we are conducting 
interrogations'' in your testimony before the House Permanent Select 
Committee on Intelligence, on February 7, 2008. Do the approaches in 
the AFM give you the tools you need for conducting intelligence 
operations?
    General Maples. The 18 approaches listed in FM 2-22.3 provides DOD 
interrogators the tools necessary for interrogations, which are an 
integral part of intelligence operations.

                      AL QAEDA ALLURE DIMINISHING?

    5. Senator Levin. Director McConnell, several times in your 
prepared statement you suggest that al Qaeda's reputation and allure 
may be fading. Do you believe the erosion is significant and lasting?
    Mr. McConnell. [Deleted.]

                         IRAQ--DEPTH OF STRIFE

    6. Senator Levin. Director McConnell, in recent testimony, you 
stressed that ``[M]any Sunnis who participate in local security 
initiatives retain a hostile attitude toward the Shiite parties that 
dominate the government, and some Shiite leaders still view many anti-
al Qaeda in Iraq Sunni groups as thinly disguised insurgents who are 
plotting to reverse the political process that brought the Shiite to 
power.''
    You also noted that ``Improved security is a necessary but not 
sufficient condition to stabilize Iraq. Bridging differences among 
competing factions and communities and providing effective governance 
are critical for achieving a successful state, but moving ahead on that 
road has been tough for Iraq . . . the political gaps between Iraqi 
communities . . . remain deep.'' Is one implication of your remarks 
that the Iraqi people and the elites are themselves as yet unpersuaded 
that Iraq is destined to be stable and secure?
    Mr. McConnell. [Deleted.]

                           NEED FOR PRESSURE

    7. Senator Levin. Director McConnell, do you believe that the Iraqi 
Government, security forces, and broader political and religious 
leaders will take responsibility for their country's destiny without 
pressure from the United States, including the message that our 
commitment is not open-ended?
    Mr. McConnell. [Deleted.]

           AMBITIONS AND FEARS OF SUNNIS, SHIITES, AND KURDS

    8. Senator Levin. Director McConnell, have the Sunni elites 
accepted minority status in a decentralized Federal Government, or do 
they still generally harbor ambitions to regain their former dominant 
position in Iraq? Do the Shiite elites remain convinced that the Sunnis 
intend to reassert their authority, and do they lack confidence that 
they can resist the Sunnis without substantial external assistance--
either from the United States or from Iran?
    Mr. McConnell. [Deleted.]

              SECTARIAN POTENTIAL OF IRAQI SECURITY FORCES

    9. Senator Levin. Director McConnell and Lieutenant General Maples, 
if the political process breaks down altogether in Iraq, do you expect 
that the Iraqi security services will split apart along sectarian and 
ethnic lines and become combatants in a civil war?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    10. Senator Levin. Director McConnell and Lieutenant General 
Maples, would the tribal groupings we have been working with also 
become organized assets in a civil war?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

                      STRENGTH OF AL QAEDA IN IRAQ

    11. Senator Levin. Director McConnell and Lieutenant General 
Maples, how would you characterize the level of success we have 
achieved against al Qaeda in Iraq?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    12. Senator Levin. Director McConnell and Lieutenant General 
Maples, what portion of this success is due to military actions, 
actions by Iraqis themselves turning against al Qaeda in Iraq, and 
actions by Iraq's neighbors in stemming the flow of foreign fighters 
and material support into Iraq?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

   INTELLIGENCE SUPPORT AGAINST IMPROVISED EXPLOSIVE DEVICE NETWORKS

    13. Senator Levin. Director McConnell, the national intelligence 
agencies are focused on countering al Qaeda and other terrorist groups, 
and particularly on supporting the military's campaigns against al 
Qaeda in Iraq and Afghanistan. Some in the military have expressed 
concern that the intelligence agencies are not adequately supporting 
the armed forces' struggle against improvised explosive device (IED) 
networks--specifically the flow of funds and materials into Iraq that 
support these networks. Have you closely examined the type and level of 
national intelligence support committed to the IED problem?
    Mr. McConnell. [Deleted.]

                         IRANIAN AGENTS IN IRAQ

    14. Senator Levin. Director McConnell, how many Quds Force 
operatives do you estimate are operating in Iraq?
    Mr. McConnell. [Deleted.]

    15. Senator Levin. Director McConnell, are there significant 
numbers of Iranian agents from other Iranian government organizations?
    Mr. McConnell. [Deleted.]

    16. Senator Levin. Director McConnell, what is the range of 
activities that these personnel are engaged in?
    Mr. McConnell. [Deleted.]

                     STRENGTH OF IRANIAN INFLUENCE

    17. Senator Levin. Director McConnell, how would you characterize 
the degree of influence Iran exercises over the Shiite organizations 
and population as a whole in Iraq? Is this influence growing or 
shrinking?
    Mr. McConnell. [Deleted.]


              THREAT ESTIMATES SUPPORTING F-22 ACQUISITION

    18. Senator Levin. Lieutenant General Maples, my understanding is 
that you and the Defense Intelligence Agency (DIA) are responsible for 
producing a consensus estimate of the threat that is the basis upon 
which we develop and purchase weapons systems for the future. Is that 
correct?
    General Maples. Essentially, that is correct. DIA is tasked in DOD 
Instruction 5105.21 to ``[s]upport the DOD weapons system acquisition 
process by producing threat assessments within DIA or validating 
assessments produced by other Defense Intelligence Components for all 
major DOD acquisition programs . . .'' For each Major Defense 
Acquisition Program, DIA works with the intelligence analysis center 
supporting the lead Service responsible for developing the program to 
convene a Threat Steering Group (TSG). The TSG consists of all DOD IC 
agencies with analytic responsibilities for areas potentially affecting 
the system under development. The System Threat Assessment Report 
(STAR) for the program is produced by the Service intelligence center 
and reviewed by the agencies represented on the TSG, including DIA. 
When each agency's concerns have been resolved, DIA validates the STAR 
for use in the defense acquisition process. Should an analytical 
disagreement arise that cannot be resolved, the STAR process allows for 
the representation of alternative views.
    DIA also validates the Capstone Threat Assessment (CTA) series of 
documents, the DOD IC's official assessment of the principal threat 
systems and capabilities within a category of warfare that a potential 
adversary might reasonably bring to bear in an attempt to defeat or 
degrade U.S. weapon systems undergoing development. CTAs look out 20 
years and are not associated with any specific U.S. weapon system.

    19. Senator Levin. Lieutenant General Maples, my understanding is 
that one principal reason that there is a difference of opinion between 
the DOD leadership and the Department of the Air Force over continued 
production of the F-22 aircraft is a disagreement between their 
respective estimates of the severity of future threats in the fiscal 
year 2025 timeframe. Are you aware of this disagreement?
    General Maples. DIA is not aware of disagreements between DOD 
leadership and the Department of the Air Force over the severity of 
future threats in the fiscal year 2025 timeframe.
    DIA  has  validated  two  principal  threat  documents  for  use in 
 support  of  the  F-22 acquisition program: the System Threat 
Assessment Report for the F-22A, published by the National Air and 
Space Intelligence Center (NASIC) in November 2006, and the Air CTA, 
published by NASIC in August 2006. Both documents arc in the process of 
being updated. DIA also validates the Joint Country Forces Assessment 
(JCOFA), which provides estimates of future threat order of battle, to 
include air assets. The JCOFA process is similar to that of the STAR in 
that it includes the pertinent Service intelligence centers in both 
action and review.

    20. Senator Levin. Lieutenant General Maples, what is the process 
that the DOD uses to resolve disagreements that arise?
    General Maples. In the event of substantive disagreement between 
production centers, should the TSG be unable to resolve the 
disagreement into a single DOD IC position, the position held by the 
production center with primary analytical responsibility for the issue 
will become the position slated in the STAR. Centers with analytical 
responsibility for aspects of the issue under consideration that still 
disagree with the stated position may submit alternative text stating 
their disagreement. In the rare case of a significant issue where: (1) 
different assessments based on the same intelligence exist, (2) both 
assessments meet the validation criteria noted below, and (3) agreement 
cannot be reached on appropriate language, the senior acquisition 
intelligence official in the production center or office may request 
alternative text. The validation criteria include appropriateness and 
completeness of the intelligence, consistency with existing 
intelligence positions, and use of accepted analytic tradecraft in 
developing assessments.

    21. Senator Levin. Lieutenant General Maples, do you know whether 
the DOD and the Air Force are both using the DIA-approved threat 
estimates? If they are not, on what basis would they use a different 
estimate?
    General Maples. So far as DIA is aware, both DOD and the Air Force 
are using the same DIA-approved threat estimates.

                     NORTH KOREA'S NUCLEAR PROGRAM

    22. Senator Levin. Director McConnell, your January quarterly 
report to this committee, as required by the National Defense 
Authorization Act for Fiscal Year 2007, continues to assess--in its 
unclassified version--that the IC has ``high confidence that North 
Korea has pursued efforts to acquire a uranium enrichment capability, 
which we assess is intended for nuclear weapons. All the IC agencies 
judge with at least moderate confidence that this past effort continues 
today. The degree of progress towards producing enriched uranium 
remains unknown, however.''
    Assuming North Korea had a program, is it possible that North 
Korea, like Iran, has suspended it? If so, how possible would you say 
that it is?
    Mr. McConnell. [Deleted.]

    23. Senator Levin. Director McConnell, what possible considerations 
might have led, or might lead, North Korea to abandon an existing 
highly enriched uranium (HEU) program?
    Mr. McConnell. [Deleted.]

    24. Senator Levin. Director McConnell, under what conditions might 
we expect North Korea to continue any existing HEU program activity?
    Mr. McConnell. [Deleted.]

    IMPLEMENTATION OF SIX-PARTY TALKS AGREEMENT ON DENUCLEARIZATION

    25. Senator Levin. Director McConnell and Lieutenant General 
Maples, as a result of the agreement reached in the Six-Party Talks, 
North Korea is required to take steps to disable and then dismantle its 
nuclear weapons program. The disablement process, which was supposed to 
have been concluded by December 31, remains incomplete. The press has 
indicated that North Korea claims to have slowed the removal of fuel 
from its 5-megawatt reactor in response to late fuel deliveries and 
because the United States has not accepted the regime's declaration of 
its nuclear activities. Some of the slow-down occurred at the 
suggestion of the United States to address some health and safety 
issues. What is the IC's assessment of why North Korea slowed the 
removal of fuel from the reactor?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    26. Senator Levin. Director McConnell and Lieutenant General 
Maples, given the slower pace, when can we expect the disablement to be 
completed?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

                   NORTH KOREAN NUCLEAR PROLIFERATION

    27. Senator Levin. Director McConnell, your written statement notes 
you remain concerned North Korea could proliferate nuclear weapons 
abroad. Has North Korea proliferated nuclear materials or technology to 
other countries? If so, when, and to whom? Is such proliferation 
ongoing?
    Mr. McConnell. [Deleted.]

    28. Senator Levin. Director McConnell, how would you assess our 
ability to detect North Korea's nuclear proliferation activities?
    Mr. McConnell. [Deleted.]

    29. Senator Levin. Director McConnell, do you have any reason to 
believe that North Korea is providing assistance to, or cooperating 
with, other states seeking nuclear weapons, such as Iran or Burma?
    Mr. McConnell. [Deleted.]

    30. Senator Levin. Director McConnell, what factors or motivations 
would prevent North Korea from proliferating nuclear material, or 
technology, to terrorists?
    Mr. McConnell. [Deleted.]

    31. Senator Levin. Director McConnell, are there any circumstances 
under which North Korea might knowingly proliferate nuclear weapons to 
terrorists or other nations?
    Mr. McConnell. [Deleted.]

                    STRATEGIC MODERNIZATION PROGRAMS

    32. Senator Levin. Director McConnell, the United States, Russia, 
China, and other nuclear weapons states have ongoing strategic 
modernization programs. At what point do modernization programs present 
a concern or a threat?
    Mr. McConnell. [Deleted.]

                         ANTI-SATELLITE WEAPONS

    33. Senator Levin. Director McConnell, China demonstrated an anti-
satellite (ASAT) capability last year, creating debris that will last 
for decades. The United States recently used a SM-3 missile from the 
Navy's ballistic missile defense program to shoot down a dead United 
States satellite. While clearly this effort was driven by a need to 
protect populated areas from exposure to the toxic satellite fuel, it 
did demonstrate an ASAT capability. What are the long-term implications 
of both actions for development--not just research or testing--of ASAT 
systems globally?
    Mr. McConnell. China and Russia are using the United States, 
intercept of a National Reconnaissance Office satellite for their 
campaign to portray the United States' intention to weaponize space. In 
addition, Russia has claimed the use of the SM-3 missile--developed for 
missile defense purposes is proof this was an ABM/ASAT test and has 
tried to link the intercept to the missile defense sites issue in 
Europe.
    [Deleted.]

    34. Senator Levin. Director McConnell, conversely, do these two 
actions improve the chance of an international discussion on ASAT 
weapons or debris mitigation or prevention?
    Mr. McConnell. International discussions on ASAT weapons and debris 
mitigation/prevention have been ongoing even prior to either of these 
two actions being performed. In specific, there exists the U.N. 
Committee on the Peaceful Uses of Outer Space (COPUOS), the U.N. 
Conference on Disarmament (CD) Prevention of an Arms Race in Outer 
Space (PAROS), and the international Interagency Space Debris 
Coordination Committee (IADC).
    Since 2002, Russia and China have been collaborating in the CD/
PAROS forum on a joint proposal that would prohibit signatories from 
testing or deploying weapons on orbit (Draft Treaty on the Prevention 
of the Placement of Weapons in Outer Space). Russia recently updated 
the draft proposal in June 2007 and this proposal is still under 
debate. Of note, the draft treaty would not have banned the Chinese 
ASAT test or the U.S. satellite engagement. For COPUOS, space debris 
has become the top priority and the committee is working on developing 
``Rules of Good Behavior'' in outer space to address the issue. To this 
end, COPUOS, in June 2007, endorsed the IADC's ``Space Debris 
Mitigation Guidelines'' document.

                       BALLISTIC MISSILE THREATS

    35. Senator Levin. Director McConnell and Lieutenant General 
Maples, in July 2006, North Korea attempted to launch a Taepo Dong-2, 
but it failed within the first minute after launch. Given the failure 
of the July 2006 Taepo Dong-2, does the IC judge that North Korea has 
any operational intercontinental ballistic missiles (ICBM) deployed?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    36. Senator Levin. Director McConnell and Lieutenant General 
Maples, given the failure in July 2006, does the IC judge that North 
Korea would need to conduct additional development and testing to have 
a reliable long-range ballistic missile capable of striking the United 
States?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    37. Senator Levin. Director McConnell and Lieutenant General 
Maples, does the IC assess that North Korea has developed reliable and 
effective re-entry vehicle technology that would successfully survive 
re-entry of an ICBM flight?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    38. Senator Levin. Director McConnell and Lieutenant General 
Maples, does the IC assess that North Korea has developed a reliable 
nuclear warhead for a ballistic missile that would work effectively 
from launch through re-entry and successful detonation at 
intercontinental ranges?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

                        IRAN'S MISSILE PROGRAMS

    39. Senator Levin. Director McConnell and Lieutenant General 
Maples, previous unclassified testimony and reports indicate that Iran 
currently has the largest inventory of short- and medium-range 
ballistic missiles in the Middle East, numbering hundreds of missiles. 
Is that still correct?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    40. Senator Levin. Director McConnell and Lieutenant General 
Maples, last year's testimony indicated that Iran's ballistic missile 
program was focused on regional missile capabilities. Is that still the 
case?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    41. Senator Levin. Director McConnell and Lieutenant General 
Maples, does the IC assess that Iran is likely to have an ICBM 
capability deployed by 2015, without foreign assistance?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

 TERRORIST ATTACK MORE LIKELY THAN INTERCONTINENTAL BALLISTIC MISSILE 
                                 ATTACK

    42. Senator Levin. Director McConnell and Lieutenant General 
Maples, for a number of years, the IC has judged that it is more likely 
that the United States would be attacked by terrorists than by long-
range ballistic missiles, and that an attack against the United States 
with a weapon of mass destruction is more likely to be delivered by 
means other than a ballistic missile. Is that still the judgment of the 
IC?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

    43. Senator Levin. Director McConnell and Lieutenant General 
Maples, how long does the IC judge that will be the case, for example, 
for the next decade?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]

              RUSSIAN REACTION TO EUROPEAN MISSILE DEFENSE

    44. Senator Levin. Director McConnell and Lieutenant General 
Maples, Russia has made numerous harsh statements and threats 
concerning the proposed deployment of a U.S. missile defense system in 
Poland and the Czech Republic, including the possibility of targeting 
nuclear missiles at those nations. What do your organizations judge is 
the most likely Russian reaction if the deployment goes forward, and 
what do you believe is a plausible worst-case Russian reaction?
    Mr. McConnell. [Deleted.]
    General Maples. [Deleted.]
                                 ______
                                 
             Questions Submitted by Senator Daniel K. Akaka

                           FUTURE CHALLENGES

    45. Senator Akaka. Director McConnell, recent history has once 
again demonstrated that some of the most potentially devastating 
threats come from areas and directions that are generally unpredicted. 
Or, even if highlighted by intelligence personnel, these threats do not 
receive the adequate attention and resources necessary to respond to 
them before it's too late. Your testimony before this committee 
highlights many areas for concern, especially in the space and 
cyberspace domains, that are relatively young in their development. 
What geographic region of the world or subset of space/cyberspace 
threats not identified today has the biggest potential to be a future 
challenge to U.S. national security and is currently not a priority in 
the Western IC?
    Mr. McConnell. [Deleted.]

    46. Senator Akaka. Director McConnell, when do you speculate 
attention and resources need to be turned toward this area?
    Mr. McConnell. [Deleted.]

                          CONTINUING EDUCATION

    47. Senator Akaka. Director McConnell, education is important to 
me. I am especially concerned at the widening gap between the number of 
U.S. students graduating with post-secondary degrees in science, 
engineering, and computer technology disciplines when compared with 
China and India. With the growing cyberspace threats to America's 
information infrastructure and corresponding economic security that you 
mentioned, how concerned are you with the availability of people from 
the future technological talent pool that will be able to help us 
mitigate these threats?
    Mr. McConnell. The DNI is concerned with the widening gap between 
the number of U.S. students graduating with post-secondary degrees in 
science, engineering, and computer technology disciplines compared to 
other countries. To that end, through our National Intelligence 
University (NIU) System, we are actively encouraging institutions to 
develop and emphasize, and individuals to pursue, degrees in these 
fields. Our programs with universities not only encourage student to 
study intelligence analysis, but also to obtain degrees in mathematics, 
computer science, and other technological specialties. In addition, we 
are working jointly with the DOD on the ``Flagship Program'' which 
focuses on teaching students critical languages, such as Farsi, Urdu, 
and Chinese. With the development of the NIU System, we now have a 
means by which to gather IC education requirements and anticipated 
shortfalls. We will continue to close that gap through our partnership 
with academia.
                                 ______
                                 
               Questions Submitted by Senator Mark Pryor

                       NUCLEAR NON-PROLIFERATION

    48. Senator Pryor. Lieutenant General Maples, in your testimony you 
state, ``Russia retains a relatively large stockpile of non-strategic 
nuclear warheads. Nuclear weapons or material diversion remains a 
concern despite increased security measures. Some nuclear facilities 
and research reactors remain vulnerable to internal theft, sabotage, or 
a well-executed terrorist attack.'' How effective have our Departments 
of Energy, State, and Defense nuclear non-proliferation programs been 
in trying to reduce this nuclear proliferation threat that has been of 
concern for years?
    General Maples. [Deleted.]
    Weapons-usable nuclear material will likely remain more vulnerable 
to theft than warheads because it is stored in diverse facilities that 
have different security practices and levels of accessibility than do 
weapons sites. Undetected diversion of weapons-usable nuclear material 
has likely occurred, and we are concerned about the total amount of 
material that could have been diverted or stolen in the last 15 years. 
However, there has been a marked decline in the number of observed 
nuclear material interdiction cases since the time immediately 
following the collapse of the Soviet Union and the subsequent 
implementation of several ongoing threat reduction programs.
    [Deleted.]

    49. Senator Pryor. Lieutenant General Maples, from your 
perspective, have U.S. nuclear non-proliferation efforts reduced the 
vulnerability of attacks or internal theft of Russian nuclear 
stockpiles?
    General Maples. [Deleted.]
    Russia's nuclear material protection, control, and accounting 
practices have been slowly improving over the last several years. 
Progress on security enhancements is most advanced at civilian 
institutes and Russian navy sites. Progress is impeded at facilities 
within the Federal Agency for Atomic Energy State Corporation (Rosatom) 
nuclear weapons complex, which contains large amounts of material of 
proliferation interest, because Russian security concerns prevent 
direct U.S. access to sensitive materials. We remain concerned about 
the insider threat and potential terrorist attacks at facilities 
housing weapons-usable nuclear material.

    [Whereupon, at 12:14 p.m., the committee adjourned.]

                                 
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